The African Centre for Energy Policy (ACEP), an energy policy think tank, is calling for mining investment law to ensure that the country’s mineral revenue is collected, disbursed and spent in a transparent manner.
The Centre suggested that the country needs to introduce a law on resource rent tax in the mining sector to capture a share of excessive profits while introducing other exempted taxes without negatively affecting long term mining investment.
“Government must develop a public investment management plan and judiciously apply mineral revenues to the realisation of government’s investment objectives.”
Mr Ismael Ackah, Head of Policy Unit, ACEP, made the call in Accra at a launch of a report titled: “Golden Days for Newmont.”
He said according to Extractive Industries Transparency Initiative, Newmont has been enjoying ‘Golden Days’ because the country had failed to capture adequate and fair share of the mineral value over the years.
This he said was critical because government had lost an estimated $90 million in 2011/2012 as a result of mining stability agreements and $387 to $1168 million from non- optimisation of royalty receipt from 1990 to 2007.
Mr Ackah said from 2010 to 2013, the country’s average share of the total value for gold production was seven per cent, while government received $1.7 billion in taxes, the total value of gold production in 2014 was exceeding $23 billion.
He said the report revealed that from 2003 to 2012, Newmont paid less than $500 million dollars tax to government despite reporting annual revenues of $931 million in 2012.
Mr Ackah said the country’s domestic revenue is expected to be 8.1 per cent lower than the 2014 budget estimates, explaining that the situation is likely to persist with decreasing oil revenues which could lead to cut in social services such as education and health.
The Centre commended government for re-negotiating the Newmont contract, while urging the Executive government to introduce a law on resource rent tax to capture a share of excessive profits.
ACEP called for effective transparency and accountability to track share of royalties that goes to traditional authorities as well as effective tax administration to detect and publish transfer pricing and other illegal corporate practices.