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The government must scrap taxes, especially Value Added Tax, on exploration activities to make Ghana’s mining sector competitive and attractive to investors, the President of the Ghana Chamber of Mines (GCM), Mr Joshua Mortoti, has appealed.
That, he said, would drive and attract more investment to the sector and promote growth.
Mr Mortoti, who is the Executive Vice President and Head of Gold Fields West Africa, made the appeal during interaction with journalists in Accra last Friday on the mining sector, and said Ghana was losing exploration investments to countries such as Australia, British Columbia, Mali and Burkina Faso, Nigeria, among others, due to the low taxes on exploration in those countries.
The programme was on the theme “Contributions of the mining sector to the development of Ghana”.
“Relative to its peers in the sub-region, Ghana has a high tax regime for both exploration and operating mines,” he stated.
The President of GCM, therefore, entreated the government to exempt input cost on exploration from taxes, and also review the framework and application of Growth and Sustainability Levy.
MrMortoti said there was the need for government to introduce incentives on exploration to attract more companies to the sector.
He said exploration was crucial to the mining industry since it was through exploration that new resources were found, stressing that it was through exploration that the Ahafo, Cardinal Mines were developed.
The President of GCM asserted that considering the age of the existing mines, there was the need for more exploration activities to be done to find new resources.
That, he said, would give confidence to investors to continue to invest in the sector so as to promote the sector and not put it in jeopardy.
MrMortoti said it took about two to three years for exploration activities to be completed, adding that only one out of ten exploration activities was successful.
The President of GCM said exploration was capital intensive and yet it was the government who benefitted first from it.
Touching on fiscal contribution of mining to the Ghanaian economy, MrMortoti said it contributed about GH¢6.5 billion to the economy through taxes, royalty and dividends.
He said producing member companies of GCM returned an average of $3.7 billion (76 per cent of revenue) annually through the domestic financial system, which provided immediate liquidity to the forex market.
“Mining is about sustainable development and not just rent. We should focus on harnessing the full benefit, beyond the direct fiscal contribution,” MrMortoti stated.
The First Vice President of GCM, Mr Fred Attakumah, said mining should be seen a growth pole to develop other sectors of the economy.
He said the government should pay attention to exploration and provide incentives to attract more investment to the sector to help the country find new mineral resources.
The Chief Executive Officer of GCM, DrSulemanuKoney, in remarks, said the programme was meant to build strong partnership with the media to tell the industry’s stories.
