Source: The Scandal
On Friday the 21st May 2010, the late President Mills met with the Managing Directors of all the Destination Inspection Companies (DICs) operating in the country at the Castle. The meeting was to examine the problems bedeviling Ghana’s Valuation Systems at our Ports which was causing serious revenue losses to the state.
In attendance was the then Chief of Staff Mr. Henry Martey Newman, the then Minister of Finance Dr. Kwabena Duffour, Honorable Hannah Tetteh, then Minister of Trade, the Commission of Customs, Excise and Preventive Service (CEPS), the Commissioner General of the Ghana Revenues Authority and some others including some Deputy Ministers.
At that Meeting, the Commissioner-General of the GRA and the Commissioner of Customs made presentations and demonstrated to the President how the state was losing Millions of dollars on a regular basis at the Ports through the alleged connivance and falsification of documents by some DICs and Importers.
The two argued that with the support of Bankswitch’s software, the CEPS could take over the valuation duties at the Ports to help stem the huge losses of revenue the country was recording. At this meeting, a brief power point presentation showed how the country lost a total of GHc12.6 million in only six transactions. (Averagely the Tema Port records about 25,000 transactions every month).
This revelation shocked the President, and he instructed that the CEPS be allowed to run its own Valuation System for a Three Month period so that a final decision could be taken. WHAT THE PRESIDENT AND THE TWO GENTLEMEN WHO MADE THE PRESENTATION DID NOT KNOW WAS THAT SOME PEOPLE IN THAT MEETING WERE NOT GOING TO GIVE UP THAT EASILY. And so the instruction was allegedly ignored and till date the old order prevails and the revenue losses continue to increase.
Last week we began a series of write-ups on how Politicians have allegedly taken over the Tema Port and why the corruption in that place cannot be easily done away with. In that first part of the story, we showed how every Government since 1997 has insisted on introducing new Destinations Inspection Companies (DICs) to the Port and allocated the Valuation of Imports to them.
NDC One under President Rawlings brought in two DICs namely; Gateway Services Limited and BIVAC International. Under President Kufuor, the NPP also brought in Ghana Link Network Services and Inspection and Control Services. Then upon the assumption of office by the NDC in 2009, the Mill’s Administration brought in yet another DIC namely WENFONTEN.
The real reasons for the introduction of DICs by every regime cannot be farfetched. All imports into the country are categorized into geographical zones and allocated to each DIC. The DICs are responsible for scanning and valuation of these imports. It is the DICs that prepare the Final Classification and Verification Report (FCVR) which shows how much duty an importer should pay.
The DICs are given one percent of all import duties they process. Your Authoritative Scandal has documents that show that as far back as 2008, these DICs could make as much US$20 million dollars a year from their services. Today these figures have more that doubled. Destinations Inspection is a very profitable business.
It must be noted however that even though on record the DICs are entitled to one percent of the import duties, they are actually given only .82 per cent of that one per cent. We do not as yet know where the remaining .18 per cent goes. The Ministry of Trade and Industry holds joint bank accounts with the DICs for the purpose of these transactions.
It has been demonstrated over and over again that there are too many flaws in the valuation system operated by the DICs. Experts have said that over 80 per cent of invoices on dutiable imports are fake.
We are informed that there are two printing houses in Accra and Tema where these fake shipping documents are generated. It is these fake documents that are allegedly used to prepare the Final Classification and Verification Reports (FCVRs) by some DICs and thus denying the State of Millions of dollars.
Unfortunately for Ghana, these DICs are so powerful because of the alleged special backing they have from some Politicians and also the special relations they have with Governments and their Political Parties.
From the said May 21st 2010 meeting where the Late President Mills asked that the GRA and CEPs be allowed to assume Valuations of our imports, it is alleged that the then Trade Minister preferred that GCNet be allowed to deploy their own Valuations Module and even presented a proposal on that to the President. But Customs Service in a Paper argued that GCNet does not have any such Module. There are also doubts that the proposal by the GRA and CEPs based on President’s Mills’ instructions on Valuations, ever got to the President.
What is even worse is that Bankswitch, a Company that was contracted in 2007 to provide CEPs and GRA with a software and data and to set up the Valuation Module to enable CEPs and GRA to carry out their duty of Valuations, was sidelined and their contracted eventually abrogated.
As you read this piece, Bankswitch is in the International Court at The Hague, claiming damages totaling over One Billion Ghana Cedis. That is yet another judgment Debt that will very soon hit the nation.