President Akufo-Addo has embraced the recommendation put forth by KPMG to terminate Strategic Mobilisation Ghana Limited’s (SML) provision of upstream petroleum and minerals audit services for the Ghana Revenue Authority (GRA).
President Akufo-Addo clarified that as the upstream petroleum and minerals audit services have not yet commenced, with no payments made for these services, they are deemed eligible for termination according to KPMG’s recommendations.
Furthermore, the President emphasized the necessity of SML’s downstream petroleum audit services, citing notable benefits accrued by the GRA and the State since the inception of SML’s services.
These benefits include significant increases in petroleum product volumes and tax revenue, along with enhanced monitoring capabilities, minimizing instances of under-declaration.
In a detailed five-page press release issued on Wednesday, April 24, the President highlighted KPMG’s findings, indicating that the GRA has integrated external price verification tools into its operations, including the Integrated Customs Management System (ICUMS), making SML’s role redundant in this aspect.
However, recognizing the need for refinement, President Akufo-Addo directed a review of the downstream petroleum audit contract, particularly focusing on the fee structure.
In light of SML’s proven expertise over the past four years, the President instructed a shift from a variable to a fixed fee structure.
Additionally, other contract provisions such as intellectual property rights, termination clauses, and service delivery expectations are to be thoroughly reviewed and amended as necessary.
This comes after an audit report by KPMG shed light on the revenue assurance contract between the Ghana Revenue Authority (GRA) and Strategic Mobilization Limited (SML), revealing a positive impact on state tax revenue.
The report indicates a significant surge in volumes, totaling 1.7 billion litres, resulting in a noteworthy increase in tax revenue to the State, amounting to GHS 2.45 billion.
Moreover, qualitative benefits were underscored, including the introduction of 24/7 electronic real-time monitoring of outflow and partial monitoring of inflows of petroleum products at depots equipped with SML-installed flowmeters.
Additionally, SML’s implementation of six levels of reconciliation further bolstered the monitoring process.
These insights were shared in a press statement released on Wednesday, April 24, by Eugene Arhin, the Communications Director of the Presidency.
However, the report also advises a review of the contract for downstream petroleum audit services, with a specific focus on the fee structure, suggesting areas for refinement to ensure fairness and effectiveness.
President Nana Akufo-Addo initiated the KPMG investigation on January 2 this year, following an exposé by the Fourth Estate, to examine the contract between SML and GRA.
Subsequently, President Akufo-Addo received the KPMG audit report on Wednesday, March 27, as announced in a Facebook post by Eugene Arhin, the Director of Communications at the Presidency, on Wednesday, April 3.
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Source: Comfort Sweety Hayford/ATLFMNEWS
