Maravi

(PROGRESS) Ghana to Raise Taxes on Minerals in the Ground

Ghana to Raise Taxes on Minerals in the Ground?

JJS: ... And rather than tax the earnings of sovereign citizens, why not forget taxing and instead acknowledge the economic value of land, resources, and privileges, recover this surplus of society, and disburse this commonwealth in ways to benefit everyone equally? Toward that solution, Ghana is taking a step.

Ghana government urged to ignore mining companies’ complaints over new tax hikes

The National Coalition on Mining (NCOM) -- a grouping of communities affected by mining, NGOs, and individuals engaged in mining sector advocacy -- has urged the Government of Ghana to ignore complaints from mining companies operating in Ghana, following the new fiscal regime increases the country’s share of benefits from mining.

In the view of the Coalition, the complaints from the mining company are simply a smokescreen to cover the super profits the industry has enjoyed for long years in Ghana and Africa as a whole and “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.”

Praising government for the step it has taken in the mining sector, the Coalition said the steps are part of a set of actions that are urgently needed to improve the contribution of the sector to the economy and people of Ghana.

NCOM further charged that Ghana and Africa as a whole cannot continue forever with investment relations in which: mining production remains an enclave with no linkages and local value-addition, private mining companies pay land rent of GH¢0.50 per km2 per annum, stability agreements lock government royalty receipts to only 3%, the environmental and social cost of mining is externalized to the public and communities, and human rights violations, especially of communities in mining areas occur with impunity.

In the 2012 Budget Statement and Economic Policy presented to Parliament by the Minister of Finance and Economic Planning, Dr. Kwabena Duffuor, government sought to increase corporate tax rate from 25 per cent to 35 per cent; 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.

The budget also noted the government’s intention to 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.

NCOM stressed that the high price of gold has even triggered calls on the government of Ghana from traditional architects of the liberalized mining regimes -- the World Bank and the IMF -- to raise certain taxes in order to generate more benefits from the mineral wealth of the country.

Listing other African countries where tax regimes have been changed, NCOM said “When the world price of copper increased by nearly 400% between 2000 and 2007 the government of Zambia increased taxes in order to raise its share of mining revenue in the face of similar hostility and threat from the mining companies.

To see the whole article, click here .

JJS: Who does deserve the value of minerals? Nobody made them. And everybody -- by exerting consumer demand -- makes them valuable. For those two reasons, the economic value of not just minerals but also of surface land and the EM spectrum, and even the value of government-granted privileges, should all be the commonwealth of the people at large.

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Editor Jeffery J. Smith runs the Forum on Geonomics.

Labels: GHANA, MINING, TAXATION

posted by MrK @ 7:13 PM