Chamber of Mines calls for Mineral Revenue Management Act
THE Ghana Chamber of Mines is calling for a law that will provide a framework on how mining revenues should be allocated.
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Known as the Mineral Revenue Management Act, this law is similar to the Petroleum Revenue Management Act which serves the same purpose in the oil sector.
The chamber believes such a law in the mining industry will ensure transparency in the utilisation of revenue generated from mining.
Ghana’s mining sector has been a significant contributor to the nation’s Gross Domestic Product (GDP), export earnings and government revenue over the years.
However, the absence of visible legacy projects and a clear legal framework governing the use of mineral revenue has led to growing concerns among citizens about whether the country is truly benefitting from the sector.
According to the GRA, the total direct taxes attributable to the mining and quarrying sector increased from GH¢6.38 billion in 2022 to GH¢11.55 billion in 2023.
The 81.1 per cent growth in the sector's tax payments consolidated its position as the country's largest source of direct domestic tax revenue.
It accounted for 22.7 per cent of aggregate direct domestic tax receipts mobilised by the GRA in 2023 as compared to 18.6 per cent in 2022.
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Specifically, corporate income tax payments (CIT) improved from GH¢3.58 billion in 2022 to GH¢7.47 billion in 2023.
The sector's CIT payments represent 25.5 per cent of aggregate CIT receipts in 2023 and 64.68 per cent of the mining sector's total direct tax receipts.
Mineral royalties also increased from GH¢1.79 billion in 2022 to GH¢2.77 billion in 2023 on the back of a rise in the price of gold.
The quantum of payroll taxes, PAYE, attributed to the mining and quarrying sector also rose by 30.4 per cent to GH¢1.31 billion in 2023 from GH¢1.00 billion in 2022.
On the whole, the mining sector's tax payments constitute 8.8 per cent of domestic revenue and 8.6 per cent of total government revenue in 2023.
In an interview with the media after a field tour of some mining companies in the Western Region, the Director of External Relations and Communication at the Chamber of Mines, Ahmed Nantogmah, said the Chamber believed enacting a legal regime for the management of mineral revenue would enhance transparency, allowing citizens to better understand and appreciate the sector’s contribution to national development.
VAT on exploration
Mr Nantogmah also reiterated the Chamber’s call for the government to remove the VAT on exploration.
He said: “Mining companies pay VAT when they do drilling and assaying, which is very expensive”.
“So if you want to encourage more mining, then the government needs to remove the VAT on exploration, especially the drilling and assaying cost, so that people can spend more money to invest in the exploration.”
“You can do exploration and not find anything and that money will go down the drain,” he stated.
He said the government imposing VAT on exploration meant it was taxing investments.
Illegal mining
The Director of Communications also expressed concern over the negative impact of illegal mining on the operations of responsible companies, calling for stronger government enforcement to combat the menace.
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He said the government must ensure adequate security for licensed mining companies to operate without fear.
He emphasised that commercial mining companies were committed to responsible mining practices, including safeguarding the environment, creating jobs, paying taxes and sourcing goods and services locally to support the country’s development.
Mr Nantogmah further urged the media to help distinguish between responsible mining companies adhering to Environmental, Social, and Governance (ESG) standards, and illegal mining activities that harm the environment.