The High Court, Accra, has affirmed a GH¢19 million tax liability imposed by the Ghana Revenue Authority (GRA) on Scancom PLC, owners of MTN Ghana.
On November 9, the High Court, Accra, (Commercial Division) presided over by Justice Afi Agbanu Kudomor ruled that the GRA did not err in law when it imposed a Value Added Tax (VAT) liability on Scancom PLC for Imported Services between 2014 to December 2017.
This was after the MTN appealed against the imposition of VAT liability at the high court.
Justice Kudomor held that “GRA did not err in law when it imposed National Health Insurance Levy and Ghana Education Trust Fund Levy (together with interest and penalties) on Scancom PLC’s on their Imported Services from August 2018 to December 2018 irrespective of whether they were applied to Taxable or Exempt services.”
She said GRA did not act arbitrarily when it applied the Ghana Educational Trust Fund Levy and National Health Insurance Levy each of 2.5 per cent on the imported services by Scancom PLC irrespective of whether Scancom PLC’s imported services were used to produce Taxable or Exempt supplies.
“It is for these reasons that the instant Tax Appeal fails. There will be no order as to costs, each party is to bear its own costs,” the court said in its judgement,” Justice Kudomor added.
In 2020, the GRA commenced a comprehensive tax audit on MTN Ghana, spanning the period January 2014 to December 2018.
The audit focused on all aspects of MTN’s businesses including Input VAT claims related to goods and services procured by MTN Ghana, VAT on services imported by the company and Input Value Added Tax claims related to office premises constructed by the telecom giant.
Unhappy about the method at arriving at the tax liability, Scancom PLC sued GRA on the basis that GRA erred in law and acted arbitrarily by imposing the tax liability order on the company for the period January 2014 to December 2017.
Scancom PLC wanted the court reverse GRA’s decision to impose additional VAT of GH¢8,793,598 and penalty and interest of GH¢10,933,119 on imported services utilised by Scancom PLC for its telecommunication business.
They asked the court to reverse GRA’s decision to impose additional Ghana Education Trust Fund Levy and National Health Insurance Levy of GH¢6,379,483 and penalty and interest of GH¢2,566,124 on imported services utilised by Scancom PLC for its business.