The National Coalition on Mining (NCOM) yesterday commended government for the new fiscal initiatives introduced in mining sector in the 2012 budget statement, saying that it is in line with steps that were urgently needed to improve the contribution of the sector to the economy and people of Ghana. It has, therefore, called on government to ignore complaints from mining companies about these initiatives and rather proceed with immediate implementation of these new taxes and the critical review of the fiscal regime and mining agreements.
“The upward adjustment and an overhaul of the fiscal regime constitute a set of actions that ensure that the country improves upon its share of benefits from the mining sector,” the Coalition said in a statement signed by Abdulai Daramani, Programme Officer Environment Unit Third World Network.
In the 2012 Budget Statement and Economic Policy presented to the Parliament by the Minister for Finance and Economic Planning, Dr Kwabena Duffour announced an increase in corporate tax rate from 25 per cent to 35 per cent.
It also said government will impose a windfall profit tax of 10 per cent and implement a uniform regime for capital allowance of 20 per cent for five years for mining companies as well as review the principle of ring-fencing as applicable to the Natural Resources Sector in 2012 to prevent companies undertaking a series of projects from deducting costs from new projects against profitable ventures yielding taxable income.
The mining industry has expressed concerns about the increases and said it will hurt their operations.
“The Coalition is calling on government to ignore these usual unfounded complaints as they are simply a smokescreen to cover the super profits the industry has enjoyed under the long years of liberalised mining regimes in Ghana and Africa as a whole,” the Coalition said.
The complaints are also a subtle threat to any further reforms to increase or introduce additional taxes to raise revenue and improve the developmental impact of mining in Ghana.