Hikes in mining taxes is not anti-investment move – Deputy Finance Minister
Deputy Finance Minister Seth Terkper has asked stakeholders not to see recent hikes in the corporate mining tax and the introduction of a windfall tax as an anti-investment drive by government.
In the 2012 Budget statement, the Government announced an increase in the corporate tax rate for mining companies to 35 per cent from 25 percent. It also introduced a windfall profit tax of 10 per cent and slashed the capital allowance rate from 80 per cent to 20 per cent for five years.
Mining companies have argued that the tax hikes would affect investment and expansion of projects while the reduction in the capital allowance rate would increase the amount of income available for tax and lead to lower profits.
Speaking at a post budget seminar organised by PricewaterhouseCoopers Ghana, Mr Terkper said the move was in line with the government’s efforts to rationalise tax, adding that discussions would be held with sector players on the implementation of the proposals.
He said the committee would also look at the formula for the calculation of the windfall tax.
On the question of stability agreements signed with some mining companies, Mr Terkper said while the government respected the sanctity of agreements that would not close the door to renegotiation.
He said the Government was seeking to raise more taxes in 2012 through expansion of the tax net and education to increase voluntary compliance.
Mr Terkper said the government was making efforts to enhance infrastructure through clear financing structure so as not to leave projects uncompleted and build up arrears.
Mr Michael Asiedu-Antwi, Partner, PricewaterhouseCoopers Ghana, lauded the Government for the macroeconomic performance in 2011, saying all the targets set were achieved and called for a higher performance in 2012.
He urged the government to remain committed to fiscal discipline and not to overspend to achieve the targets set for 2012.
Mr Felix Addo, Country Senior Partner, PricewaterhouseCoopers, said the management of the economy both on the fiscal and monetary sides turned out very well in 2011.