The mining business is encountering a problem that has the potential to undermine its aggressive benefit and hinder future development, the Ghana Chamber of Mines has cautioned.
The Chamber stated the brand new tax measures launched by the federal government might drive exploration companies away, choke make investmentsment, and even collapse some current mining firms.
Talking on PM Categorical Enterprise Version on Pleasure TV, Appearing Chief Govt of the Chamber, Ahmed Nantogmah, lamented the impression of government’s latest fiscal strikes, particularly the imposition of a 3 per cent levy on gross production and the controversial Worth Added Tax (VAT) on exploration actions.
“Exploration is the lifeline of mining and now there’s a VAT on exploration. Most of those explorers are danger takers, however they’re being punished for taking that danger,” he stated.
He defined that the core actions of exploration – drilling and assay had been now being taxed, considerably rising the financial burden on already fragile, and early-stage ventures.
“You’ll be able to think about placing $10 million into exploration, making no discovery, and nonetheless paying VAT on that failed try. That VAT won’t be refunded. It’s cash thrown down the drain,” he stated.
In response to the Chamber, the coverage shift was proving pricely for Ghana’s mining potential.
He stated “Smaller companies that drive most greenfield exploration lack the monetary muscle to soak up these new taxes, and because of this, many are transferring their operations to neighbouring international locations like Côte d’Ivoire and Kenya, the place exploration is incentivised, not penalised,” he stated.
“These firms are small. They don’t have deep pockets. That’s why they go to locations like Kenya or Ivory Coast, the place they don’t pay this VAT. So, you’ll see a motion of exploration firms going there.”
He stated Ghana was already falling behind its friends in enticeing recent exploration, a development that would result in long-term consequences for the nation’s mining output and income streams.
“No exploration at present means no new mines tomorrow,” he famous.
