Gov’t must watch high mining tax regime – Chamber of Mines

Ghana must watch its high mining tax regime which may scare investors into the sector, Sulemanu Koney,  the Director of Analysis, Research and Finance at  the Chamber of Mines, has said.

Speaking at a training workshop for journalists and editors on ”reporting on extractives” organised by the Journalists for Business Advocacy, Mr Koney said Ghana is one of two countries in Africa, which imposed huge and numerous taxes on the mining industry.

”Ghana’s effective tax rate that is the aggregate of all mining taxes, stands at forty seven per cent,” he said, adding that, the figure is more than thirteen per cent higher, compared with taxes in Burkina Faso.

Mr Koney said government last year increased corporate tax from 25 to 35 per cent while the office of the Administrator of Stool Land also shot its ground rent by over 1.8 million per cent from GH¢0.5 per kilometre to GH¢36.5.

”The Chamber is unhappy with the unilateral decision by the Stool land to revise the rate without consultation with the mining industry,” he said.

He said the mining Industry was of the view that the cumulative effect of the recent changes in fiscal regime, will be out of place to introduce the Windfall Profit Tax.

On Gold Prices and cost of mining, Mr Koney said a huge cost of the revenue of the mining companies was spent on inputs such as electricity, diesel and payment of salaries and taxes.

For instance, he said, the mining industry last year spent over $3.2 billion, representing 73 per cent  of the $4.6 gold revenues generated on logistics, electricity, diesel, taxes, payment of salaries, adding that, diesel purchases alone cost the mining companies, last year, over one million dollars.

Mr Koney said mining held a good prospect for the development of the country and said the fiscal regime should be attractive to enable more players to invest in the industry, adding that, attractive terms are required to encourage investment in explorations.

Source: GNA