Ghanas Mining Taxes: Are they New and Adequate?

By Alhassan Atta-Quayson, Third World Network  Africa

Ghanas 2012 National Budget Statement and Economic Policy proposed, among others, to bring the following changes to mining operations in the country: increase corporate tax rate from 25% to 35%; install a windfall tax of 10%; and implement a uniform regime for capital allowance of 20% for five years. It also sought to review the principle of ring-fencing to prevent companies undertaking a series of projects from deducting costs from new projects against profitable ventures yielding taxable income. This was commended by the National Coalition on Mining and the Ghana Mineworkers Union as part of steps urgently needed to improve the contribution of the sector to the economy and people of Ghana. However the Chamber of Mines have gone on the offensive, indicating that the mining sector is already over-taxed and such initiatives are only inimical to their operations. But are these taxes really new as the industry would want Ghanaians to believe and more importantly adequate in ensuring equitable distribution of Ghanas mineral wealth? I offer my opinion

STATEMENT BY NATIONAL COALITION ON MINING ON 2012 BUDGET

PROCEED WITH FURTHER REFORMS IN THE MINING SECTOR

The National Coalition on Mining (NCOM) commends the Government of Ghana for the new fiscal initiatives introduced in the mining sector. This commendation is in line with the Coalitions view that these steps are part of a set of actions that are urgently needed to improve the contribution of the sector to the economy and people of Ghana. It is in this regard that the Coalition calls on the government to ignore complaints from mining companies about these initiatives. Rather, the government should proceed with immediate implementation of these new taxes and the critical review of the fiscal regime and mining agreements. The upward adjustment and an overhaul of the fiscal regime constitute a set of actions that ensure that the country improves upon its share of benefits from mining sector.