Mining Coys Gasp For Breath

… Excessive Taxation, Unfair Electricity Bills Collapsing Business

From Michael Boateng, Sunyani
Ghana is gradually becoming the most expensive place for mining business in the world due to excessive taxation and lack of equity and fairness in pricing of electricity.

The Chief Executive Officer of the Ghana Chamber of Mines, Sulemanu Koney, who said this during an interaction workshop with journalists in Sunyani indicated that the rising cost of mining operations is making Ghana lose its potential as a preferred investor destination for mining business.

He said focusing solely on the front end cost of mining by taxing more is scary to prospective investors and that “the cost in exploration alone is not small.”

Mr. Sulemanu Koney pleaded with the government to reduce the front end cost to eliminate the barrier to entry of investors, adding that VAT on drilling and Laboratory testing services must be taken out.

According to the CEO of Ghana Chamber of Mines, if the excessive taxation and high cost of electricity and fuel continue, the mining industry would be trembling, leading to job losses and economic destitution.

He reiterated that the mining industry has been leading the country’s foreign exchange earnings with US$3.1billion representing 85% of forex in 2015, and a leading tax payer and contributor to GRA's Domestic collections in recent years, paying corporate tax of GHC463.12million.

Mr. Koney says interruptions through the review of existing fiscal regimes, especially without due consultations, distorts the free flow of operations, which is detrimental to the mining business.

Recent imposed fiscal measures on mining companies include the increase in corporate tax from 25% to 35%, proposed windfall profit tax of 10%, review of Stability Agreements and change in mineral royalty from a 3-6% range to a flat rate of 5%.

The CEO of the Chamber of Mines noted that these increases in the fiscal regimes have adverse effects to business, emphasizing that “mining is a catalyst for development and not just an exclusive industry that provides fiscal imports”.

He said tax is good but for the state to maximize the benefits from the exploitation of its natural resources, fiscal imposition should not be the only and probably the best way to do that.

According to the CEO, mining should be fully integrated into the local economy, disclosing that the Chamber is encouraging the involvement of local enterprises in the business of mining to generate more employment, deepen economic integration and increase revenue for government.

He urged government to set up and revive industries to provide alternative employment in mining communities such as Bonsa tyres