Subah-GRA Report Not A Sham

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Kwaku Sakyi-Addo Told

The Chairman of the technical Committee which investigated the contract between Subah Info-Solutions Ghana Limited and the Ghana Revenue Authority (GRA), has defended its report on the case saying, it is not a sham.

Some social commentators, Civil Society Organization (CSOs) and Kwaku Sakyi-Addo, the Chief Executive Officer of the Chamber of Telecommunication, have raised serious concerns over the composition of the technical committee set up by the government.

It was made up of representatives from the Ministry of Finance, the GRA, the National Communications Authority (NCA), the Attorney General (AG) and Subah Info-Solutions.

The Telecoms Chamber, through its CEO, expressed its utter disappointment in the manner in which the committee overlooked the main issues for which it was set up, to investigate the Ghana Revenue Authority (GRA)-Subah Infosolutions Contract.

The committee, during its work, invited staff from Subah to tell their side of the story, but never invited any of the telcos, even though Subah and GRA, accused the telcos, without evidence of refusing to cooperate with Subah, between 2010 and 2012.

The report, has since come under heavy public criticism with a letter to the Minister of Finance, authored by Kwaku Sakyi-Addo pointing out oversights in the Committee’s Report.

The letter was copied to the Executive Secretary to the President, The Chief of Staff, Flagstaff House, The Minister of Communications, The Minister of Justice and Attorney General, The Commissioner-General, GRA and the Director-General, NCA.

The letter titled; “Committee Report On The Service Agreement Between GRA and Subah Infosolutions” reads; We have received a copy of the above report, details of which have been widely circulated to the media. Mobile Network Operators (Teleos) have had reservations about public statements issued in September 2013 by the Ghana Revenue Authority (GRA) about the failure of Telcos to comply with their legal obligations. This was in the aftermath of media reports that Subah Infosolutions had been paid GhC74 million from 2010-2012 for services allegedly not rendered to GRA.

“We did not react because it was our expectation that the Committee set up by the Ministry of Finance would enable Telcos to clarify or correct certain facts that had been overlooked or misrepresented”.

“By this letter, we wish to bring to your kind attention the following observations and comments for review and subsequent action”.

1. The 14-member Committee did not invite or speak to any Telco in its investigations. However, it had three representatives from Subah Infosolutions.

2. The Report, under “SCOPEOFSERVICE”(Section 4, paragraph 2) reads: “In the wake of the signing of the service agreement, Subah requested to physically connect its equipment to the physical nodes of the Teleos, but the request for physical access was denied by the Teleos, 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 Teleos.”
Comment:
a) According to Paragraph 1(BACKGROUND) of the Committee’s Report, the Revenue Agencies Governing Board (RAGB) signed the contract with Subah Infosolutions on May 5, 2010. However, the law requiring Telcos to allow electronic monitoring, i.e. (CST (Amendment) Act, 2013 (Act 864), was passed in July 2013.
b) GRA did not introduce Subah to any telco until after Act 864 was passed. A copy of the introductory correspondence written by GRA to the Ghana Chamber of Telecommunications on October 28, 2013, and to all Telcos is attached for your information. Telcos could therefore not have denied Subah access to their respective nodes prior to their introduction since they were not even aware of Subah’s existence or the service it had been contracted to provide. Enquiries made with all the Telcos have also confirmed that none of them received a letter from Subah itself requesting for this interconnection. Subah’s first letter to Telcos asking for a meeting was dated [October 28, 2013J following the introduction letter from the GRAreferenced above.

3. The Report also reads (Section 4, paragraph 3) that: “….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.

Comment: The Call Data Records (CDRs) which Telcos submit to NCA are for International In-bound Traffic on which there is no CST charged as the calls originate from outside Ghana. Therefore Subah Infosolutions could not possibly have verified CST by analyzing CDR shed by NCA. Telcos do not send CDRs to GRA, for which domestic traffic on CST is levied. Telcos are audited on site by GRA itself.

4. Paragraph 8 of the Executive Summary reads: “The Committee believes that the increase in access lines cannot be contributed (sic) to the efforts of SUBAH. The value of access lines amounted to 21% increase in revenue between June 2010 and October 2013. The threshold was therefore increased by 21%. In other words, 21% of the incremental revenue is being deducted before the remainder is apportioned between SUBAHand Government.

Comment: If Subah Infosolutions did not contribute to the increase in access lines between June 2010 and October 2013, as admitted by the Committee, and it did not electronically audit Telcos or analyze CDRsfor the reasons explained above, we fail to fathom the basis for apportioning revenue between the Government and Subah.

“In spite of these reservations, Telcos have co-operated with GRAand its agents, Subah Infosolutions, since November 2013 to ensure compliance with the law. Each Telco is currently at an advanced stage of completion, following technical and legal due diligence”.

“We hope that this information helps to provide the fundamental information for further decision-making.
On behalf of our members, please accept/Sir, the assurances of my highest esteem”.

The Ghana Integrity Initiative (GII) says the institutions represented on the committee were one way or the other, linked to the case, therefore, their findings and recommendations cannot be trusted.

But the chairman of the committee, Dr. Edward Siaw on Citi FMs Eyewitness News insisted that “it is not a sham, we did a professional job and when the report went, it was looked at, it was referred to other government agencies and then government accepted it.”

He also denied reports that Subah had a representation on the committee explaining that, the three representatives from Subah only sat in the committee’s meetings during the re-negotiating of the contract between Subah and the GRA.

“They were party to the contract so that is when they came but on the other issues, like the validity of the contract, they were not part,” he clarified. He stressed that it was imperative for the representatives of Subah to be present at the re-negotiating of the contract and therefore, there is no case of conflict of interest.

Mr. Siaw admitted working closely with the GRA through the Finance Ministry as a Tax Policy Consultant but vehemently denied any case of another conflict of interest in the investigations of the technical committee.

“I can assure you, I am a professional and I know what a conflict is and what is not a conflict,” he said.

Meanwhile, Mary Adams of the Ghana Integrity International (GII) observed that despite the explanations being given by Mr. Siaw, “there is a case of serious conflict of interest in connection with the chairperson of the committee.”

She called for the setting up of a new committee to conduct another investigation into the Subah-GRA deal “so that we will get better results because, what we fed into the system is what we got back.”

According to her, Ghana is having serious challenges in dealing with matters of corruption “and so if we have had the opportunity and government is supposed to show commitment, we believe this is not the right way at all.”

In November 2013, government constituted a technical committee to investigate a contract agreement between the GRA and Subah Info-solutions after news broke that the GRA had paid huge amounts of money to Subah for no work done.

Subah was contracted by the GRA to electronically monitor domestic call data records (CDRs) of the telecommunication companies in the country to enable the GRA collect appropriate taxes from the telcom companies.

The technical committee was to review and renegotiate the service agreement between the Revenue Agencies Governing Board (RAGB) and Subah Info-solution. The committee’s report on the matter described the Subah-GRA contract as valid and can therefore, not be set aside.

The report also discounted earlier claims that the GRA paid GHC144 million to Subah for services rendered within three years but clarified that an amount of GHC74 million was rather paid.

But there is widespread dissatisfaction with the work of the committee.

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