By Kafui Gale-Zoyiku and Kofi Ahovi
The mining industry has reacted to the new tax reforms introduced in the 2012 budget statement by the government.
According to the industry, the new reforms would deter the mining companies to make further investments in the sector. However no categorical statements have so far been made on the fate of any of the major new investment programmes planned by several gold mining firms including Goldfields and Newmont mining.
These reactions were made at the end of year get together and farewell celebration for the out-going chief executive officer of the Ghana Chamber of Mines, Dr. Joyce Aryee. The get-together was also used as an opportunity to officially introduce Dr. Tony Aubynn, the new chief executive of the chamber to the mining community. Dr Aubynn with his new appointment is returning to the mining sector where he was at Goldfields Ghana before moving to head Tullow Oil Corporate Affairs department.
In the 2012 budget statement, the corporate tax rate for the extractive industries –mining and oil and gas sector – is being increased from the current 25% to 35%; while a windfall profit tax of 10% will also be collected from all mining companies in addition to a uniform tax regime for capital allowance of 20% for five years for mining, as is also the case in the oil and gas sector.
The issue with mining, according to the government, is about fair and transparent sharing of the benefits and windfall gains from the exploitation of the country’s precious and irreplaceable natural resources. During the recent global financial crisis, prices of gold, cocoa and oil reached their peak levels ever on the international market. Yet, the country did not benefit much in terms of public revenues from the price hikes, particularly from gold.
The government has, therefore, taken the step to critically review the fiscal regimes and mining agreements, with the view to ensuring that the country benefits adequately and fairly from the gains in the mining sector. To this end, government has set up a National Re-Negotiation Team to advance this objective.
It is the hope of the government that the utilization of the expected gas from the Jubilee oilfield to power the Aboadze Thermal Plant and other Independent Power Producers from next year will drive down the cost of energy for the mining and oil companies, thereby compensating for the new taxes introduced.
Ghana is expected to have a functioning gas processing plant and infrastructure linking the FSPO Kwame Nkrumah to the processing plant and on to Aboadze and Prestea through Esiama by December 2012.
Daniel Owiredu, president of the chamber, pledged support to the communities in which they work that regardless of the setback from the 2012 budget statement, mining companies will continue to pursue proactive strategic relationship with them in order to maintain build on the consensus they have achieved so far on issues relating to sustainable national development.
The in-coming CEO of the chamber, Dr. Tony Aubynn, hoped that the industry will still maintain its enviable reputation as the highest contributor to the economy. He commended the secretariat as well as the captains and players of the industry for their support for the chamber and for ensuring that mining becomes a catalyst for national development.
The mining industry has reacted to the new tax reforms introduced in the 2012 budget statement by the government.
According to the industry, the new reforms would deter the mining companies to make further investments in the sector. However no categorical statements have so far been made on the fate of any of the major new investment programmes planned by several gold mining firms including Goldfields and Newmont mining.
These reactions were made at the end of year get together and farewell celebration for the out-going chief executive officer of the Ghana Chamber of Mines, Dr. Joyce Aryee. The get-together was also used as an opportunity to officially introduce Dr. Tony Aubynn, the new chief executive of the chamber to the mining community. Dr Aubynn with his new appointment is returning to the mining sector where he was at Goldfields Ghana before moving to head Tullow Oil Corporate Affairs department.
In the 2012 budget statement, the corporate tax rate for the extractive industries –mining and oil and gas sector – is being increased from the current 25% to 35%; while a windfall profit tax of 10% will also be collected from all mining companies in addition to a uniform tax regime for capital allowance of 20% for five years for mining, as is also the case in the oil and gas sector.
The issue with mining, according to the government, is about fair and transparent sharing of the benefits and windfall gains from the exploitation of the country’s precious and irreplaceable natural resources. During the recent global financial crisis, prices of gold, cocoa and oil reached their peak levels ever on the international market. Yet, the country did not benefit much in terms of public revenues from the price hikes, particularly from gold.
The government has, therefore, taken the step to critically review the fiscal regimes and mining agreements, with the view to ensuring that the country benefits adequately and fairly from the gains in the mining sector. To this end, government has set up a National Re-Negotiation Team to advance this objective.
It is the hope of the government that the utilization of the expected gas from the Jubilee oilfield to power the Aboadze Thermal Plant and other Independent Power Producers from next year will drive down the cost of energy for the mining and oil companies, thereby compensating for the new taxes introduced.
Ghana is expected to have a functioning gas processing plant and infrastructure linking the FSPO Kwame Nkrumah to the processing plant and on to Aboadze and Prestea through Esiama by December 2012.
Daniel Owiredu, president of the chamber, pledged support to the communities in which they work that regardless of the setback from the 2012 budget statement, mining companies will continue to pursue proactive strategic relationship with them in order to maintain build on the consensus they have achieved so far on issues relating to sustainable national development.
The in-coming CEO of the chamber, Dr. Tony Aubynn, hoped that the industry will still maintain its enviable reputation as the highest contributor to the economy. He commended the secretariat as well as the captains and players of the industry for their support for the chamber and for ensuring that mining becomes a catalyst for national development.
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