The Strategic Mobilisation Ghana Limited (SML) has denied portions of KPMG’s report on the Full Risk-Reward-Partnership Agreement with the Ghana Revenue Authority (GRA).
While it is happy about KPMG’s report debunking the false claim that $100 million has been paid to SML, as well as refuting the 10-year contract, it will, however, not accept certain facts of the report.
The rejection stemmed from a report of the findings contained in a press release dated April 24, 2024 issued by the Director of Communication at the Presidency.
The audit on the agreement between SML and GRA by KPMG was on the instructions of President Akufo-Addo, following an investigation by the Fourth Estate.
SML claimed in a counter release, signed by its Director of Support Services, Yaa Serwaa Sarpong, that several portions of the KPMG findings and recommendations are false.
One of the findings disputed by SML is the claim that fees estimated to be paid under the 5-year consolidated contract is averagely about GH¢1 billion per year.
The release also denied the suggestion that SML received a compensation of GH¢1,061,054,778.00.
The release further disagreed with the findings of KPMG that a need assessment was not conducted before SML commenced operations.
Similarly, SML also rejects KPMG’s observation that Integrated Customs Management System (ICUMS) has inbuilt capabilities for External Price Verification.
The release is dissatisfied with KPMG’s failure to state GRA taxes of 31.5% taken before payment, interest payments of 32% plus the investment repayment made by SML and other taxes/duties over the period creates a very unbalanced impression of the relationship between the compensation and the investment and other related costs.
With that, it said “this omission is highly misleading.” It explained that SML is an independent assurance audit firm contracted to audit ICUMS, assess the customs at Customs Technical Service Bureau (CTSB) on classification and valuation and audit the values accordingly.
In that sense, ICUMS cannot audit its operations, for which SML services provide extra oversight when it comes to classification and valuation.
SML disagrees with KPMG’s findings regarding the petroleum volumes and the tax revenue realised as a result of the compliance tools that led to increased volumes.
During the audit, KPMG used NPAs/ESLA Volumes to evaluate the performance of the downstream petroleum to determine GRA tax revenue.
It further added that the compensation quoted by KPMG was without reference to the investments made and the taxes paid by SML over the period within the consolidated contract.
“Regarding the transaction audit services, SML delivered fully on its obligations as outlined in the contract. SML’s productive performance was the basis for subsequent recommendation and awarding of the downstream petroleum audit contract.
“The Transaction Audit contract includes provisions for monitoring and evaluation services as well as a value-for-money assessment, both of which were diligently adhered to by the GRA and SML,” it stressed.
SML, together with the GRA, submitted to KPMG that the taxable volumes are properly evident in the Bank of Ghana’s petroleum tax revenue receipts in its Petroleum Holding Accounts.
SML supervision within the sector showed a drastic monthly average increase from 207,885,058 to 450,175,163 in taxable volumes for the periods – January to December 2019 and May 2020 to April 2021 respectively.
This translates into GH¢10,308,536,872 in excess gained volumes and excess revenue of GH¢14,844,293,095.
This significant increase in monthly average taxable volumes of 450 million litres has been sustained over the past three years of SML’s deployment.
In that regard, it said KPMG’s reliance on incorrect data inevitably steers them towards inaccurate conclusions.
SML disclosed that it has instructed its lawyers to examine some of KPMG’s professional misjudgements and their extension into the other unfavourable positions of the government.
The release was more than satisfied with KPMG confirmation that other important benefits from the SML technology, including a deterrent for under-declarations and several levels of reconciliation and validation, prevented revenue losses to GRA.
It assured the public that SML is fully committed and confident in its efforts to ethically contribute to building a better Ghana for present and future generations while adhering to high ethical standards.
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