Chief Executive of Ghana Cylinder Manufacturing Company (GCMC), Madame Frances Essiam, has disclosed that Board members of the company in 2017 determined their own allowances that saw increments up to 200%.
According to her, when the Board of Directors met on Thursday, 21st September, 2017 just after their induction, they determined their own monthly fees and sitting allowances.
Madame Frances disclosed this when her entity took its turn at the Public Accounts Committee sitting on Tuesday, 5th April, 2022.
Member of Parliament for Tamale Central, Murtala Mohammed had raised concern that though the company failed to pay its taxes, it increased allowances of Board members, some over 200%.
He pointed out that Section 1171 of the Income Tax Act 2015, Act 896 makes failure to pay income tax on the due date without reasonable excuse an offence.
He said, “You haven’t been able to honour your tax obligations and yet you increase the allowances of the board members, some up to 200%. And you think that this law should not be applicable? Is it deliberate? If you could tell this committee because I didn’t see any clear reasons given.”
The Auditor-General’s 2018 Report on the Public Accounts of Ghana, Public Boards, Corporations and other Statutory Institutions reports that contrary to the tax laws, the company did not withhold taxes on the sitting allowances paid to the Board members, which denied the government a tax revenue of GH¢4,400.00
Resistance of the Board members, the Report said, to the tax deduction on their allowances resulted in the anomaly.
In her explanation, however, the Chief Executive indicated that management informed the Board members that the existing allowance is GH¢500 before their appointments but they refused to listen.
According to her, she was compelled to write to the Ministry of Energy later on which in 2018 wrote back and indicated the Ministry was responsible for setting up board allowances in consultation with the Finance Ministry.
She said, “Mr. Chairman, they threw us out of the room, me and my HR then who was taking their minutes. I apologize on behalf of the management but we believed when it came to board issues, I should be saying it this way.”
