The Ghana Chamber of Mines says government must use scientific approach if it wants to increase existing taxes or introduce new ones in the mining sector.
Late October this year, an International Monetary Fund (IMF) team led by Christina Daseking on a visit to Ghana made recommendations to government to implore ways of generating more revenues from the mining sector as prices of gold keep rising on the world market.
According to the IMF, the country which is Africa’s second biggest gold producer, is receiving low revenues compared to other countries that also produce the metals.
Ghana is Africa’s second biggest gold producer behind South Africa.
“On the revenue side, the mission encouraged the government to continue its efforts to strengthen tax administration. It also supported adoption of additional tax policy measures, particularly in the area of natural resources, where taxation is low in comparison with peer countries. Passage of new legislation to broaden the tax base will also be important,” said the IMF in a statement October 25, 2011 after completing a two-week review of Ghana’s economy.
But Chief Executive Officer of the Ghana Chamber of Mines, Dr Toni Aubynn tells ghanabusinessnews.com on telephone that additional taxes or introduction of new ones on the part of government should be done ‘scientifically’ since the soaring of gold prices does not necessarily mean mining companies are making more money.
The Reuters news service reports that Ghana was in talks with gold miners over additional taxes so as to benefit from the soaring price of the precious metal.
Dr Aubynn explained that government must consider the cost of producing an ounce of gold which according to him some companies are producing an ounce of gold at a cost of $1,200.
“It must be done based on facts and scientifically. We should not think the high price of gold necessarily means companies are making more profits,” Dr Aubynn told ghanabusinessnews.com.
Gold is trading around $1,650 per ounce on the international market.
He said 1.3 per tonne ore turned into grates is insignificant in Ghana as compared to a country like Mali which has bigger grates.
“Government must also consider the cost of doing business in the country,” he said adding that the taxes should be in a way that will not drive away investors.
Dr Aubynn indicated that the chamber is not against the move since every Ghanaian must benefit from the sector.
He noted that the mining industry contributed about 23% of the country’s internally generated revenues in 2010.
By Ekow Quandzie