Parliament on Friday, March 13, passed the Growth and Sustainability Levy, 2026, to reduce taxes on mining companies’ gross production from three to one per cent.
This is intended to cushion mining firms following roll out of the Minerals and Mining Royalties Regulation, which increase the royalties mining companies when the price of the commodity rises on the international market.
Mr Thomas Nyarko Ampem, Deputy Finance Minister, explaining the rationale for reducing the Growth and Sustainability Levy, said when an ounce of gold hits 1900 dollars, mining firms will pay five per cent royalties.
He said if an ounce of gold crosses 2000 dollars, mining firms will pay six per cent royalties and when an ounce of gold exceeds 4,500 dollars, mining firms will pay 12 per cent royalties.
The reduction in the levy, he said, would cater for windfall taxes.
Mr Alexander Afenyo-Markin, Minority Leader and Member of Parliament for Effutu suggested government hold on with the passage of the legislation because the reduction of the levy from 3 to one per cent will not impact positively on mining firms’ finances and expenditure.
The sliding scale royalty’s regime in Ghana’s mining sector ties royalty payments to prevailing commodity prices.
Under this system, mining companies pay higher royalties when gold prices rise and lower rates when prices fall.
While intended to stabilise government revenue, critics argue that it increases operational costs for mining firms during periods of high global prices, thus discouraging investment and threatening job security.
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Source: www.myjoyonline.com