Ghana Chamber of Mines wants Growth and Sustainability Levy reviewed

The Ghana Chamber of Mines has called on government to consider a review of the framework of the Growth and Sustainability Levy.

President of the Chamber, Joshua Mortoti explained that the levy will not make the country’s mining sector competitive especially when the government is seeking to transform Ghana as the hub of mining on the continent.

The GSL and its treatment are the first of their kind in the global extractive sector. This novelty unwinds the competitive advantage of the country at a period where the government’s foremost priority is positioning Ghana as the hub of mining on the continent. The erosion of the mining sector’s competitiveness does not only stem from the GSL-induced increase in the sector’s average effective tax rate, which is poised to rise to more than 65 percent, but also calls into question the sanctity of contracts.

Speaking at the Ghana Chamber of Mines breakfast meeting on Wednesday January 17, 2024, president of the Chamber, Joshua Mortoti said the Chamber recognizes the expediency of the government’s efforts to introduce new tax measures to improve fiscal sustainability but new taxes should accommodate the unique state of mining sector.

It is against this backdrop that we request a revision of the framework of the GSL to accommodate the unique state of operations of our various member companies while extending the life of Investment or Development Agreements by the tenor of the GSL for mining companies with such agreements,” Mortoti said.

Reacting to the concerns of the Chamber, the Minister of Lands and Natural Resources Samuel Abu Jinapor said government is looking into the concerns raised by the Chamber.

Samuel Abu Jinapor

We have held several engagements with the Ministry of Finance on this matter, but as you will all agree, 2023 was a very difficult year for our economy. And with the IMF conditionalities coming in, some of these decisions are not taken lightly. But I want to assure you that we will continue our engagement with the Ministry, and hopefully, we can find a middle ground to this issue.”

“And that ties in to the other fiscal issues you raised today, including the Growth and Sustainability Levy, and the VAT on exploration. Yesterday, at the Economic Management Team Meeting, the issue of VAT on exploration was again raised, and I can assure you that Government is seriously looking into the concerns you have raised,” Jinapor said.

Parliament in March last year passed the Growth and Sustainability Levy bill, into law replacing the National Fiscal Stabilization Levy to rake in more revenue.

The bill was expected to help rake in GHC 2.2 billion for the country in 2023.