Minority questions $300million tax waiver for AngloGold Ashanti

The Minority in Parliament has questioned the government’s decision to grant a $300 million tax concession to AngloGold Ashanti (AGA).

Parliament on Thursday ratified a development agreement between government and Anglogold Ashanti (Ghana) Limited that will see the company investing $880 million into the Obuasi mine and creating more than 3,000 jobs over the next seven years.

Anglogold Ashanti is expected to inject an estimated capital of $1,045 million over the projected 22 years lifespan of the mine.

Under the agreement, per every ounce of gold that would be extracted, Anglogold would donate $2 to a trust for the development of the Obuasi community.

Parliament also ratified a tax concession agreement between the government and

Commenting on the development in an interview, the Minority Spokesperson on Finance, Cassiel Ato Forson, said the deal was badly negotiated.

He said Ghana would lose in excess of $300 million.

“The intention is that AGA is going to invest $880 million to revamp the Obuasi mines. They are saying that the project will not be viable until the government of Ghana decides to grant them a tax concession worth $259 million dollars,” he said.

But Mr. Ato Forson said the concessions will actually exceed the $258 million stated.

“…Because in the agreement, they are reducing corporate income tax that is supposed to be for mining companies which is 35 percent. In the case of Ashanti Gold, they are giving it to them at 32.5 per cent. So I ask myself, why the discrimination? For a company with the strength of AGA, why are they reducing their tax exemptions?”

The Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah, however justified the waiver.

He explained that this was an improvement over similar agreements signed in the past between government and multinational mining firms.

The investment is supposed to yield a return of about $5 billion over the next two decades.”

“Having compared this to existing agreements and the investments to be made and the return thereof, I have no doubt in my mind that parliament has discharged its duties perfectly,” he said.

The first gold pour from the newly refitted operation is expected in the third quarter of 2019.