Sulemana Koney
The Ghana Chamber of Mines has appealed to government to reduce indirect taxes, especially Value-Added Tax (VAT), imposed on mining companies which undertake exploration works in the country.
Sulemana Koney, Chief Executive Officer (CEO) of the Ghana Chamber of Mines, made the call recently at a media engagement in Accra.
In a presentation titled: ‘Deepening the Integration of the Mining Industry into the Non-mineral Economy’, the CEO called on government to reduce the indirect taxes imposed on companies that come to the country to explore for possible areas for minerals.
He said that the drilling and laboratory service expenses of the companies should be excluded from VAT.
Ghana is the second largest producer of gold in Africa, however when it comes to the exploration of new areas to mine more gold, little work is being done in that regard, he added.
He said that due to the indirect taxes that are being charged on investors who undertake exploratory works, Ghana has become quite uncompetitive in relation to other countries in the sub-region.
He revealed that countries such as Cote d’Ivoire and Burkina Faso have more friendly environments for investors interested in exploration.
Mr. Koney noted that since exploration was the first step to producing gold, having little being done in the exploration sector of our mining industry puts our position as the second largest producer of gold on the continent at risk.
The Chamber used the opportunity to also plead with government to support Ghanaian businesses in the exploration sector.
He indicated that more than 70 percent of exploration works done in the country were by indigenous Ghanaian companies and a boost by the government in the industry would go a long way to help the economy of the country.
Parliament last year passed the Mineral Development Fund Act, 2016 (Act 912) to provide legal basis for the disbursement and management of ceded royalties to address developmental challenges affecting communities.
However, after this law was passed, its implementation has been a problem, the chamber declared.
The Chamber called on the government to inaugurate the board for the fund and also set up the mining community development schemes for the mining communities.
Mr Koney noted that the implementation of the Act was very crucial and would have an impact on the mining communities.
The Chamber also called on government to enact a mineral revenue management act, similar to the petroleum revenue management Act, 2011 (Act 815) to manage the revenue that accrues from minerals.
Mr. Koney made reference to the Ghana Revenue Authority report, which stated that the minerals sector contributed 15.8 percent of all the revenue collected in Ghana, with the first and second largest contributors being mineral companies.
By Melvin Tarlue & Akpene Darko-Cobbina