The mining sector is dealing with a problem that would erode its aggressive edge and cripple future development, the Ghana Chamber of Mines has warned.
The Chamber is elevating purple flags over new tax measures that would drive exploration corporations away, choke funding, and even collapse some present mining firms.
Talking on PM Categorical Enterprise Version on Thursday, Might 22, Appearing Chief Government of the Chamber, Ahmed Nantogmah, lamented the impression of presidency’s latest fiscal strikes, significantly the imposition of a 3% levy on gross manufacturing and the controversial Worth Added Tax (VAT) on exploration actions.
“Exploration is the lifeline of mining,” he acknowledged, “and now there’s a VAT on exploration. Most of those explorers are threat takers, however they’re being punished for taking that threat.”
He defined that the core actions of exploration – drilling and assay – are actually being taxed, considerably growing the monetary burden on already fragile, 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.”
In line with the Chamber, this coverage shift is proving pricey for Ghana’s mining potential.
Smaller corporations that drive most greenfield exploration lack the monetary muscle to soak up these new taxes, and consequently, many are shifting their operations to neighbouring international locations like Côte d’Ivoire and Kenya, the place exploration is incentivised, not penalised.
“These firms are small,” Mr Nantogmah defined. “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 warned that Ghana is already falling behind its friends in attracting contemporary exploration, a development that would result in long-term penalties for the nation’s mining output and income streams.
“No exploration immediately means no new mines tomorrow,” he famous.
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