Lower the tax bar for mining exploration - Sulemanu Koney

Chief Executive Officer of Ghana Chamber of Mines, Sulemanu Koney has said government must scrap taxes on mineral exploration as it is in the country's interest to do so.

Speaking at a dialogue series on: 'What will Ghana lose if there were no mining', Dr Koney complained: "We have a fiscal regime which requires companies to make some payments even before digging the ground and that is the challenge that we have".

For instance, he demonstrated that if an exploration firm brought in capital of $10 million, about 22 per cent would go into paying taxes and levies.

“We need to lower the barrier to entry for exploration because it serves our interest as a country”, Dr Koney insisted.

“Ideally, we should do the exploration ourselves before we invite exploration firms to come and mine but because the resources are not there, we do it the other way round”, he observed.

“When companies outsource drilling services, it comes with Value Added Tax (VAT)", he mentioned.

Also, he added, "When they outsource assaying services, they also pay VAT on them and we believe this is not too good for exploration".

He said the mining sector contributes a lot to the development of the economy through taxes.

According to the Ghana Revenue Authority (GRA), mining contributed GH¢6.82 billion, together with the quarrying sub-sector, including dividend payment of GH¢435 million in 2022.

The minerals sector also consolidated its position as the country's largest source of foreign exchange in 2022.

Data from the Bank of Ghana also shows that revenue from the export of minerals accounts for 39 per cent of gross merchandise receipts, exceeding the outturns of crude oil, cocoa and other export commodities.

Dr Koney said Ghana would have lost $1.41 billion in mineral export revenue routed through the Bank of Ghana and 2.73 billion that passed through the commercial banks were there no mining in Ghana.