The discussions on shameless acts of corruption in the media is timely and those championing these crusades deserve commendation. Among these discussions are the GYEEDA rot, loss of Ghc700 million at Custom Bonded Warehouses and the recent brouhaha over Ghc144 million alleged corruption deal involving Subah InfoSolution.

It is mindboggling to hear revenue collection agencies report excesses, while at the same time, the nation is unable to cater for developmental needs of its people. This calls to question if the targets set for these revenue collection agencies are real or probably too low because, it is believed that whatever figure that is reported, equal measure of that amount may have found its way into the pockets of individuals.

Making particular reference to Subah InfoSolution matter,  the Chronicle newspaper reported the alleged payment of Ghc144 million to a private company Subah Infosolutions LTD contracted in 2010 by the Ghana Revenue Authority to provide telecommunication traffic monitoring.

Subah, the paper claimed, was paid 4million cedis every month but the Ministry of Finance says payments to the company was stopped after concerns were raised by the Minister about the efficiency in implementation of this particular agreement.

As I listened to the Commissioner General of GRA, Mr. George Blankson Monday, October, 28, 2013, on Joy FM's Super Morning Show, I took time to note the facts and have since been going through some publications by GRA regarding this deal with Subah InfoSolution.

Background

The agreement between the RAGB and SUBAH was signed for a period of 5 years commencing May 2010 and expiring in June 2015.

The processes and procedures followed in the run up to the signing of the agreement with SUBAH fully complied with the requirements of the Procurement Act.

As part of the procurement process, the NCA carried out a technical evaluation and issued a report confirming that SUBAH has the technical expertise and equipment for carrying out the task of conducting revenue assurance on payment of CST by the telecommunication companies.

In general, the task of carrying out revenue assurance on collection and accounting for CST by the Telcos has two components:

1. Ascertaining the veracity of total volume of traffic (i.e. minutes of call) declared by the Telcos as a basis for calculating the amount of CST payable and

1. Verifying the correct application of tariffs to the individual calls (e.g. whether a call should attract, say, 8 pesewas per minute or 0 pesewas per minute).

In the wake of the signing of the service agreement, SUBAH requested to physically connect its equipment to the physical network nodes of the Telcos; but the request for physical access was denied by the Telcos, citing the risk of SUBAH listening in to the conversation and messages of their customers.

SUBAH could not therefore have access to the physical network nodes of the Telcos.

In the circumstance, SUBAH have been carrying out only the monitoring relating to verification of the application of the correct CST rate to the volume of traffic declared by the Telcos (i.e. whether the various calls are taxed at the appropriate rate). This is done by SUBAH obtaining the CDRs on the volume of traffic supplied by the Telcos to NCA containing the details of the traffic volumes they declare.

Fees

By the terms of the contract, SUBAH is paid 13.5% of the incremental revenue over and above the average monthly collection of VAT and CST revenue received from the telecommunication providers at the commencement of the contract.

Addressing implementation challenges

To address the contract implementation difficulties arising from Telco’s denying SUBAH access their physical network nodes, the following actions have been initiated:

• In May this year the Ministry of Finance called for a re-negotiation of the contract with SUBAH to review the basis for the calculation of the incremental revenue and also the fee. For this purpose a review team composed of members drawn from the Tax Policy Unit of MoF and GRA was set up. This negotiation, rendered all the more delicate against the background of the existence of a valid agreement and the possibility of judgment debt, is ongoing.

• A specific provision has been included in the Communication Service Tax (Amendment) Act 2013, Act 864, placing an obligation on the Telcos to give the Government through its agents, “physical access to the physical network nodes of the service provider’s network at an equivalent point in the network where the network provider’s payment billing systems are connected”.

Subsequent to the passage of the Act, consultations have commenced with the Telcos towards smooth implementation of the provisions in Act 864 under which SUBAH will connect its equipment to the network nodes of the Telcos for the purpose of ensuring that SUBAH will implement in full the terms of its contract with the GRA.

Payments so far

To date SUBAH has been paid a total sum of Ghc 74,356,240 for services rendered under the contract up to August 2012. This is a little over 50% of the amount stated in the newspapers.

It is worth noting that some telcos have raised legal issues over whether or not Subah InfoSolution has the right to mount gadgets at their premises to swoop on calls to and from their networks. This is already in court and so I will let it rest here.

Let's pray for Ghana our Motherland!