Accra, Aug 30, GNA - The management of SECAPS Hotel in Accra has honoured a deal with the VAT Secretariat over the settlement of tax arrears by paying the first instalment of 40 million cedis.

The VAT secretariat on August 3 went to the three-star hotel, which owed over 83 million cedis in returns from January 1999 to February 2000, to remove its movable properties.

In the process, the Managing Director of the Hotel, Mr Smart Binitie pleaded with the VAT team to give him time to see the Commissioner.

Both parties then struck a deal, under which the hotel would settle the debt by making payments in instalments. Mr Dela Heloo, Head of Field Co-ordination of the Secretariat, told the Ghana News Agency (GNA) on Wednesday that the first payment was made on August 17.

The second instalment of 43 million cedis would be paid at end of September but since the date falls on a weekend, they have agreed that it should be paid on October 2. He said the penalty of six million cedis, which included additional cost incurred by the Service through the hiring of electricians, vehicles and a warehouse, was paid earlier.

The VAT secretariat moved on the hotel after it had written to the management on numerous occasions reminding them of their tax obligations. Registered companies and organisations collect VAT on behalf of government.