Business News of Friday, 22 June 2018
Source: 3news.com
2018-06-22
Executive Director of Centre for Extractives and Development Africa (CEDA), Emmanuel Kuyole
Executive Director of Centre for Extractives and Development Africa (CEDA) Emmanuel Kuyole has expressed worry about the level of tax waivers and reduction in mineral royalties given to mining companies in the country
He observed the government has developed an appetite for giving out huge waivers to mining companies, which he said was causing the country loss of revenue from the mining sector.
“I am not very pleased with how we quickly reduce the royalty rate which we all know is one of the key [and] surest areas where the country gets revenue from the mining companies,” he stated at a workshop organized by the Institute of Financial and Economic Journalists (IFEJ) in partnership with GIZ.
Parliament on Thursday approved a 259 million-dollar tax waiver for AngloGold Ashanti with the view making the company more profitable and to be able to create more jobs for the next seven
But Mr. Kuyole observed government has technically given out lots of revenues in the sector, which have not been put out in the public domain, indicating government has reduced royalty rate from five per cent to three per cent.
“Beyond that, we are also cutting down corporate tax which is supposed to be 35% to 32%. These are all sources of revenue loss,” he stated.
Again, he said the government sometimes goes to the extent of exempting mining companies operating in the country from paying local assembly taxes, something he observed, is depriving the state of the necessary revenue from the sector.
The mining sector has been a major contributor to the growth and development of Ghana, contributing 1.35 billion ceids and 1.65 billion cedis to the country’s revenue in 2015 and 2016 respectively.
In 2015, the total contribution of the sector accounted for 16 per cent of domestic revenue by Ghana Revenue Authority.
Figures from the Bank of Ghana also shows the minerals sector accounts for 45.5 per cent of gross merchandise exports making it the leading foreign exchange earner.
Despite these contributions, the mining sector holds much more great potentials for domestic revenue generation.
According to Africa Economic outlook report for 2018, there is currently the need for urgent tax reforms in African countries including Ghana.
In view of this, Mr. Kuyole wondered why Ghana keeps cutting down on corporate taxes for mining companies, saying “If there is the need to make reforms in the tax, why then do we cut down cooperate taxes?”
He has thus underscored the need to build capacity of agencies in the sector in order for them to negotiate mining contracts well by putting the interest of the country first.
“Going forward, we need enough capacity to be able to negotiate and put the country’s interest first so that we wouldn’t act quickly when it comes to giving out mining concessions.
“What is important is that government has to enhance state agencies that lead negotiations and eschew partisan politics from all negotiations as well. We need professional negotiation jobs and make sure that we stop the practice of giving out tax concessions to the mining companies,” Mr. Kuyole advised.