CEO of the Ghana Chamber of Mines, Sulemanu Koney, has emphasized the need for the government to eliminate taxes on mineral exploration, citing it as being in the country’s best interests.
During a discussion series titled ‘What would Ghana forfeit without mining,’ Dr. Koney raised concerns, stating, “We have a fiscal regime which requires companies to make some payments even before digging the ground and that is the challenge that we have.”
As an example, he illustrated that if an exploration company invested $10 million, approximately 22 percent of that amount would be allocated to taxes and levies.
He illustrated, for example, how roughly 22% of the $10 million in capital raised by an exploration company would go toward paying taxes and levies.
“We need to lower the barrier to entry for exploration because it serves our interest as a country”, Dr Koney insisted.
“Ideally, we should do the exploration ourselves before we invite exploration firms to come and mine but because the resources are not there, we do it the other way round”, he observed.
“When companies outsource drilling services, it comes with Value Added Tax (VAT)”, he mentioned.
Also, he added, “When they outsource assaying services, they also pay VAT on them and we believe this is not too good for exploration”.
He highlighted that the mining sector significantly contributes to the nation’s economic development through tax revenues.
In 2022, as reported by the Ghana Revenue Authority (GRA), the mining industry, along with the quarrying sub-sector, including dividend payments, contributed GH¢6.82 billion. Furthermore, the minerals sector solidified its position as the primary source of foreign exchange for the country in 2022.
Data from the Bank of Ghana reveals that mineral exports generated 39 percent of gross merchandise receipts, surpassing the revenues from crude oil, cocoa, and other export commodities.
Dr. Koney stated that without mining in Ghana, the country would have lost $1.41 billion in mineral export revenue channeled through the Bank of Ghana and $2.73 billion that passed through commercial banks.