The Chief Executive Officer of the Ghana Chamber of Mines (GCM), Dr Ken Ashigbey, has called for broader stakeholder engagement on the proposed sliding-scale fiscal rule for the mining industry expected to be implemented in 2026.
He cautioned that the policy, if implemented in its current form, could adversely affect the mining industry, particularly gold producers. He said there was the need for government to engage more deeply with the Chamber to agree on an appropriate starting point for the fiscal regime that would be fair to both the state and players in the mining sector.
Dr Ashigbey cautioned that the sliding-scale fiscal policy, if implemented as currently proposed, could be inimical to the sustainability of the mining industry, noting that Ghana’s effective average tax rate on mining was already high.
The government announced a sliding-scale tax policy for the mining industry which will be implemented next year, and the policy is to ensure that mining companies pay more taxes when the price of gold shoots up in the international market and vice versa.
He was speaking in Accra on Tuesday in an interview with journalists after a press soiree organised by the Chamber.
According to Dr Ashigbey, unlike lithium, where extensive consultations had taken place over a long period, engagement on gold had been limited.
“There has not been enough engagement on the sliding-scale fiscal policy with regards to gold as has been done with lithium,” he said. “The lithium discussions have gone on for a very long time, but with gold it appears immediate, with government presenting a position that stretches over a wide range.”
Dr Ashigbey explained that the industry was concerned about the cumulative impact of the proposed measures, especially when combined with existing corporate income tax and other fiscal obligations.
“Already, as a country, our effective average tax rate is high,” he stated, adding that further increases without careful consideration could undermine investment and growth.
He said that the Chamber was not opposed to government benefiting from higher mineral prices.
“We are not saying that as the price of gold goes up, the industry should not contribute more. Even currently, the payments are percentage-based, so higher prices already translate into higher revenues for the state,” he said.
He emphasised the need to identify what he described as a “sweet spot” through dialogue.
“What we believe should happen is that government should wait and have more engagement. We all should come together to find the sweet spot that will ensure government gets its revenue and the industry remains sustainable,” he noted.
Dr Ashigbey cautioned that rushing the process could “endanger the entire industry” and urged Parliament and government to slow down consideration of the bill currently before the House.
“We need to put a brake on the process, debate it thoroughly, and bring all sides around the table to understand government’s policy rationale and objectives,” he said.
Dr Ashigbey lauded the government’s decision to scrap Value Added Tax on exploration activities, describing it as “commendable” and beneficial to Ghana.
“We have acknowledged that the removal of VAT on exploration will inure to the benefit of our country,” he said.
The CEO of GCM reiterated that sustained engagement with the mining industry players on the new fiscal policy remained critical.
“We want a situation where government gets the resources it requires, mines are able to invest and grow, jobs are created, and the industry contributes meaningfully without jeopardising its sustainable development,” Dr Ashigbey said.
BY KINGSLEY ASARE
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