Ghana dangers dropping its place as a high mining funding vacation spot as a consequence of what the Ghana Chamber of Mines describes as a dangerous tax regime.
Ahmed Dasana Nantogmah, Performing Chief Government of the Chamber, advised JoyNews’ PM Specific Enterprise Version on Thursday, Might 22, that it’s driving exploration firms to extra investor-friendly nations like Kenya and Côte d’Ivoire.
“We’re dropping to Kenya and Côte d’Ivoire due to unhealthy tax coverage,” he stated.
His issues come within the wake of the federal government’s imposition of a 3% levy on the gross manufacturing of mining companies, coupled with the introduction of Worth Added Tax (VAT) on exploration actions.
“Exploration is the lifeline of mining,” Mr Nantogmah pressured.
“Now there’s VAT on exploration. Many of the firms in that house are threat takers, however they’re paying VAT on assay and drilling, which is the best price of exploration.”
He defined that exploration firms are already struggling beneath heavy monetary dangers, and these taxes are solely compounding the issue.
“Think about this: you place $10 million into exploration. You don’t make a discover. However you’ve paid VAT on it. That VAT won’t be refunded. It’s cash thrown down the drain,” he stated.
Based on him, these insurance policies are making Ghana more and more unattractive in comparison with its regional friends.
“In the event you put that burden on exploration firms, that are largely small and don’t have the monetary muscle to soak up such losses, they’ll go elsewhere.
“And that’s what’s taking place. They’re shifting to locations like Kenya and Côte d’Ivoire, the place they don’t pay this VAT.”
Mr Nantogmah warned that if this pattern continues, not solely will Ghana lose out on new discoveries, however even current mining operations might ultimately collapse as a result of absence of a pipeline of latest initiatives.
“These firms go to jurisdictions the place their dangers are acknowledged and coverage is predictable. Proper now, we’re creating an atmosphere the place Ghana is dropping its competitiveness,” he famous.
The Chamber of Mines is looking on authorities to urgently evaluate the tax measures, particularly the VAT on exploration, to stop a complete erosion of investor confidence within the mining sector.
“This isn’t nearly cash, it’s about the way forward for Ghana’s mining trade,” Mr Nantogmah concluded.
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