The impounded pick-up truck

THE NATIONAL Health Insurance Authority (NHIA) is on the verge of losing a number of offices and other movable properties if it fails to honor its accumulated tax obligations.

The tax evasion was discovered after a tax audit conducted in the northern sector comprising various district, municipal and metropolitan schemes in the Ashanti, Brong Ahafo, Northern, Upper East and West regions headed by Nana Esi Amankwa covering the period from 2005 to 2010.

The audit according to DAILY GUIDE?S investigations had exposed the rot at the scheme?s offices with managers allegedly conniving with service providers to dupe the state of several thousands of Ghana cedis meant as taxes.

Several deals were also sighted according to DAILY GUIDE sources with some scheme managers allegedly preferring to share the tax component with service providers and suppliers regardless of their tax obligations.

At Ejisu for instance the scheme owes the Ghana Revenue Authority (GRA) GH?77,000 in back taxes while the Bawku scheme reportedly owes GH?64,000.  

A five percent withholding tax was supposed to be deducted from payments to service providers from suppliers in the acquisition of assets in accordance with Internal Revenue Act 2000 (Act 592).

Under the tax law defaults in the payment of deducted taxes more than 15 days following the previous month, attract 20% excess of the tax due and if it exceeds 3 months, it attracts 30% with liabilities which includes a penalty.

Despite these deterring penalties after the tax audit was conducted, the NHIA failed to honor its tax obligations resulting in an accumulated debt in addition to liabilities totaling about GH?100,000.  

The GRA in its quest to retrieve all monies owed it is currently confiscating assets belonging to the various schemes. The Tolon-Kunbungu Mutual Health Insurance Scheme is the first casualty having had its Toyota Hilux double cabin pickup with registration number GT 2827 Y impounded.  

If after a stipulated period the NHIA fails to pay up, the accounts of defaulting schemes in the northern sector will be garnished. There are fears that this action could grind the operations of the various schemes to a halt as they may not be able to pay service providers.

The incident comes up in the wake of concerns by the Northern Regional Director of the Internal Revenue Service (IRS), Rowland Miah over of the escalating rate at which some citizens were conniving with multinational companies and state organizations to evade taxes.   

According to him, tax evaders use various schemes like thin capitalization, income splitting; transfer pricing, tax shelters, and changing residences to avoid paying taxes.

?Only 20% of business organizations in the area pay their taxes regularly,? he indicated attributing the problem to lack of personnel needed to maximize internal revenue generation in the area.

?The entire region has only 14 officers monitoring and supervising the operations of 19 districts,? he disclosed.

He identified poor salaries, low motivation and weak positive intra linkages between the revenue agencies as factors that have contributed to low revenue generation in the region though it is obvious the region exceeds it targets annually.

He called for adequate personnel and logistical support to enable his office meet the target of mobilizing enough revenue to sustain the nation?s economy.

When contacted Dr. Nii Annan Adjetey, NHIA Director of Communications admitted a tax audit was conducted which exposed these lapses but said management is working at the national level to resolve the matter.

According to him, this particular move is unknown to internal auditors at the regional level giving assurance that the matter would be resolved in the shortest possible time.

The paper however gathered that early last week an attempt was made by NHIA authorities to have the commissioner of taxes soften his stance on the ongoing operations to allow for further negotiations regarding the debts but it ended in a stalemate.

 From Stephen Zoure, Tamale

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