Over Unfair Tax regimes in Ghana’s Mining Industry

The Vice president of Goldfields Ghana Limited, Mr Alfred Baku has lamented the unfair tax regime in the country’s mining industry and the continuous tightening of the fiscal regime by government. He explains that the situation, if not checked will contribute to the collapse of responsible and committed mining companies in the country Alfred Baku, made this known in a presentation with the theme nationalizing natural resources, at the companies mine site at Tarkwa in the western region of Ghana. “There is a need to revise the fiscal regime to generate more income. We are not against increases in the fiscal regime but it must be done well. Since there is lack of knowledge and understanding on the part of government in the mining sector there seem to be lack of trust hence the continuous tightening of the fiscal regime by government without any careful analysis on the effect on our operations in the medium to long term”, he stated. “In my opinion, government must ensure that the tax net is effective. If the tax rate is 35% it must be wide enough to capture about 95% of tax payers but if it’s covering probably 35% of tax payers then there is a problem. So how do we widen the tax net and not tightening the fiscal regime (increasing taxes?) Government, industry players union and the communities must meet to discuss how to grow the pie. There is no need to fix a hard core tax at this point in time. we have to use the sliding scale determine our tax rates, that’s if gold price increases , the tax rate increase and reduces when the price reduces. Government must ensure that there is a level playing field in the industry, he stressed. Mr Baku did not understand why his Company, Goldfields will be paying corporate tax of 35%with royalties among other taxes while other multinational mining companies pay below that rate. He believes that is extremely unfair. Some big multinational mining firms are paying 25% and 20% corporate tax rate when we are paying 35%. Besides, he did not understand why some mining firms are operating with Stability Agreements when others have no stability agreements. “We have set up a whole department to look into our progress. We are also considering using bio energy since the increasing price of electricity and the continuous power outage is seriously affecting our operations. Currently electricity costs US$ 18 cents per kilowatt per hour; bio energy can cost us 12cents per kilowatt per hour. This will help us save energy and our operations. This year our operation in

Mr Baku, middle listening attentively

BOG to commence MPC meetings

The Monetary Policy Committee (MPC) of the Bank of Ghana will commence its meetings to review developments in the economy from Monday, 7th July. The meetings will end with a press conference which will be addressed by the Governor of the Bank of Ghana Dr. Henry Kofi Wampah on Wednesday, 9th July. The meeting will also end with a decision on the appropriate positioning of the Bank’s Policy Rate which commercial banks use to determine their base rates. Next week’s meeting is expected to focus on the economy proper as the previous meetings this year have mainly focused on the fast depreciating cedi and the implementation of new forex rules introduced by the bank of Ghana in February and subsequently the withdrawal of and revision of some of the rules.