Mining Sector Recaptures Its Position as Largest Tax Payer to Ghana

Chamber AGM 2017Accra, June 12, 2017//- Figures from the Ghana Revenue Authority (GRA) have shown that the mining and quarry sector recaptured its position as the leading source of direct domestic revenue after being displaced by the finance and insurance sector in 2015.

Total fiscal receipts attributable to the mining and quarry sector increased from GH¢1.35 billion in 2015 to GH¢1.65 billion in 2016, representing a growth of 22%.

This comprised payments of GH¢399.9 million, GH¢696.9 million, GH¢550.7 million and GH¢0.54 million in Pay As You Earn (PAYE), corporate income tax, royalties and other taxes respectively.

According to the 2016 annual report of the Ghana Chamber of Mines, producing members of the chamber returned $2.30 billion out of realized mineral revenue of $3.25 billion into the country, representing 70.9%.

Also, the producing mining companies spent $1.01 billion on purchases of goods and services in-country, depicting 31% of realized mineral revenue. This amount, according to the report which is in possession of African Eye Report, exceeded the 2015 figure of $865 million.

The consecutive increase in spending on local goods and services by the producing member companies including Newmont Gold Ghana and AngloGold Ashanti mirrors the chamber’s commitment to promoting local content in the mining industry.

The country’s Minerals and Mining Act (2006), Act 703 and the Minerals and Mining General Regulations (2012), Legislative Instrument (LI) 2173 require, among other things that mining companies procure inputs from Ghana to the maximum extent possible.

The LI 2173 was facilitated by the collaborative work between the Minerals Commission, Ghana Chamber of Mines and the International Finance Corporation (IFC) as part of a broad National Supplier Development Programme in the mining industry in 2010.

A key objective of the programme is to support local enterprises to improve their competitiveness to participate in and take advantage of opportunities in the mining value chain, President of the Chamber, Kwame Addo Kufuor said at the chamber’s 89th Annual General Meeting (AGM) in Accra, early this month.

The collaboration identified 28 mining inputs which could be sourced locally albeit with varying degrees of quality improvement, he added.

These inputs Mr Kufuor mentioned include: grinding media; bolts and nuts; heavy duty electrical cables; HDPE/PVC pipes; calico bags; general lubricants; cement & cement products; and plastic sample bags.

Earlier, the government said the mining companies operating in the country  purchased 73 percent of their goods and services locally.

The Minister for Lands and Natural Resources, John Peter Amewu, said: “I have been informed that with respect to performance on true local procurement in 2015, the mining industry achieved about 73% of its planned local purchases per the local content regulations”.

“I believe that the industry will do well to achieve 100% of its planned local purchases in the coming years”, Mr Amewu urged.

The local content regulations of the mining sector require mining companies to source a list of items from local vendors.

He added that the mining sector, in 2015 contributed about 14.4% of government revenue and 34% in terms of total merchandise exports and produced about 3.6 million ounces of gold which resulted in export revenue of about US$3.3 billion.

“Also the same year mining companies repatriated about 72% of foreign exchange into the economy”.

In terms of job creation, total direct employment by the producing member companies stood at 11,628, representing a 16% increase over the 2015 recorded figure of 9,939.

Out of this, more than 98% are Ghanaian nationals, further buttressing the commitment of member companies to make mining more relevant to the people.

Besides, the producing mining companies invested in various social and economic projects such as schools, scholarships,  livelihood empowerment initiatives, agribusinesses, water and sanitation as well as health infrastructure.

By Masahudu Ankiilu Kunateh, African Eye Report

 

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