New Mining Law Will Not Be Reviewed - Govt
3/14/2012 7:31:42 AM -
Until further notice, government has no intentions of revising the various taxes imposed on companies operating in the country’s mining sector.
That, according to a deputy minister at the Ministry of Finance and Economic Planning (MoFEP), Mr Fiifi Kwetey, is because “the government has not seen the need to review the taxes” in line with the requests being put forward by the affected companies.
Mr Kwetey has, however, reiterated the government’s willingness to dialogue with the mining companies over the mode of implementation of those taxes.
The deputy minster spoke to the paper moments after addressing individuals and corporate institutions that have distinguished themselves in tax collections and payments in Accra last week.
The awards ceremony organised by the Ghana Revenue Authority (GRA), was the first of its kind aimed at motivating both tax payers and staff of the authority to be compliant and hardworking towards tax payments and collections.
“Unless there is something peculiar that will come out later, government doesn’t see the need to review those taxes,” the deputy minister said in reaction to a GRAPHIC BUSINES question on whether or not government will yield to the demands of the mining companies by revising the taxes downward.
His comments on the mining taxes come in the midst of growing concerns from the sector players that the upward adjustment of the corporate tax for mining companies from an initial 25 per cent to 35 per cent and the introduction of a 10 per cent windfall for the sector players tax could limit their individual investments in the sector and the economy at large.
The government, in introducing the various reforms made to taxes in the mining sector noted that the said reforms were to give the country more value for its mineral reserves while enabling transparency in the sector.
While non-governmental organisations with interest in mining welcomed the reforms, mining companies described it as a punitive measure.
The Ghana Chamber of Mines (GCM), had earlier told the GRAPHIC BUSINESS that the quantum of the taxes pose a threat to the survival of companies in the sector, particularly their investments on new and existing businesses.
Its Chief Executive Officer (CEO), Dr Toni Aubynn, said “this is a sector that contributes so much to the country’s gross domestic products and so you would think that actions towards that area, in the form of taxes, will be done such that it does not hurt the companies that lay the golden egg.
“But it seems that is not the case,” he observed.
Although Dr Aubynn said the chamber and mining companies for that matter was not against the country maximising revenues from its mining sector, he said the country “must not undertake certain policy decisions that have the tendency of shrinking growth rather than enabling it.
“We in the mining sector think that the taxes are too much and for them to take effect at once poses a serious challenge to the ability of mining companies to sustain and increase investments in their businesses and the economy at large,” he noted.
Added to that worry was the government’s inability to negotiate with the companies prior to the introduction of the said taxes and the supposed lack of clarity on the modalities to be used in calculating some of the taxes, especially the newly introduced 10 per cent windfall tax.
Consequently, the chamber and some of the individual companies implored on the government to revise the taxes down, a proposal they said will be key should they meet the government over the modalities.
The deputy minister, however, said the government’s posture on the issue was final, at least for the time being.
“Until further notice, government doesn’t see the need to revise the taxes in that sector. At least for what,” Mr Kwetey asked explaining that “it is because the decision is final that is why we added it to the budget.
“If it weren’t, it wouldn’t have been added to the 2012 budget,” he said as he signaled government’s unwillingness to negotiate the taxes downward.
While addressing the award winners and participants at the event on behalf of Dr Duffuor, the deputy minister had earlier said “as the custodian of the national kitty, I deem it my duty to support initiatives which increase the quantum of money that goes into the national treasury.”
But while doing that, Mr Kwetey said “government was mindful of the need not to place undue burden on the people” and by extension corporate institutions.
He congratulated the GRA for realising GH¢8,706.39 million in 2011, which is GH¢1,161.73 million above its target for that year and promised MoFEP’s full support to the authority in the discharge of its duties.
In addition to the numerous institutions and individuals who were awarded for their various roles in tax payments and collections in 2011, Newmont Ghana Gold Limited, a mining company, was adjudged the Best Tax Payer within that year.