By Mohamed Jaward Nyallay
Guma Valley Water Company (GVWC), like other state affiliated companies, has still not settled its debt with the tax man – the National Revenue Authority (NRA).
Every year, NRA loses billions in revenue from other government institutions who collect money on its behalf and refuse to deposit it.
The last Auditor General’s Report stated that Freetown’s only water utility company owed the NRA over Le100million in unpaid taxes.
“Le102,211,751 as 5.5% withholding tax was deducted for goods and services.
However, evidence of payment such as receipts and deposit slips justifying
payments made to the NRA were not submitted for review, which is in violation of
Section 130 (1) of the Income Tax Act of 2000. We recommended that the General
Manager and the Finance Director should ensure that receipts confirming payments
made to the NRA for withholding taxes deducted, totaling Le102,211,751, are
submitted to the Audit Service for verification,” the report stated.
The official response by Guma in the report was that because of how much money the company was itself owed by other state institutions, a cross debt payment arrangement had been done with everyone involved.
This exact response was also submitted to ManoReporters when we approached the water company on the issue.
“The company (GVWC) was in dialogue with the Ministry of Finance for cross debt settlement regarding debts owed by MDAs to the GVWC and debts (including withholding and PAYE taxes) owed by the GVWC to the GoSL. Furthermore, Management has committed to a monthly payment plan of Le250 million towards
PAYE and current monthly withholding tax payments,” company officials said in a statement.
There is no evidence of any receipt or correspondence to show that Guma has indeed honored the arrangement. The audit report also stated the lack of evidence to show that any money was repaid.
But Guma is not the only public utility facing a debt crisis, its sister utility, EDSA, which is responsible for distribution and supply of electricity, is also owed by government institutions to the tune of NLe421 million.
NRA have been quiet about government debt and how much institutions owe them, but annual audit reports have shown billions of leoenes in debt; from withholding to income taxes, deducted and reutilized by some institutions and in some cases embezzled all together.
Mano Reporters also sent a further question, demanding to know how much of the over Le100 million tax debt have been repaid since. Guma authorities have not responded to any of the follow up questions, despite waiting for weeks.
This is not the only monetary crisis the institution is facing. Over 70 staff who have been terminated, retired or resigned are still waiting for their end of service benefit. Right up to 2021, the company had not completed the payment of those staff.
In a response sent out to ManoReporters, Guma notes: “The Board of Directors in collaboration with Management will strive to look into this matter and come up with solutions to salvage this situation. Meanwhile, beneficiaries of end of service benefits have been categorized into groups to ensure equitable and reasonable amounts are paid at interval.”
A follow up question on how far those payments have gone and what is the timeline for a final action on the wording “strive to look into”.
State owned enterprises are in peril, a recent documentary by the Institute for Governance Reform has shown.
GVWC is heavily subsidized by government, to cover salaries, operational and administrative costs. The company has been struggling for decades to gather enough revenue on its own to finance huge expansion projects to meet the demand for water in the capital and its environs.
