The Ghana Chamber of Mines has expressed concerns regarding the continuous decrease in exploration investments within the mining sector.
The chamber has issued a warning that if immediate actions are not taken to incentivize and expedite exploration spend, both production and revenues could witness a decline.
The chamber emphasized the importance of exploration in ensuring continuous mineral production and generating revenue for the state.
Despite being Africa’s leading gold producer, Ghana was ranked among the least attractive mining destinations in the 2022 Fraser Institute’s Annual Survey of Mining Companies, highlighting the need for policy adjustments to attract investments.
The Ghana Chamber of Mines highlighted the challenges faced by local indigenes in raising capital for exploration.
The chamber’s president, Joshua Mortoti, called for the reduction of upfront costs associated with exploration and proposed an incentive scheme to facilitate effective exploration and subsequent commercial discoveries.
Mortoti specifically advocated for tax exemptions for exploration companies, pointing out that the payment of Value Added Tax (VAT) on exploration expenditure hinders exploration activity.
He believes that relieving exploration companies of VAT payment will not only improve their cash flow and operational costs but also enhance Ghana’s competitiveness as an exploration investment destination.
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The minerals and mining quarrying sector emerged as the largest contributor to direct domestic taxes mobilized by the Ghana Revenue Authority (GRA) in 2022. The sector’s fiscal payments totaled GH₵6.380 billion, accounting for 18.6 percent of aggregate direct domestic tax receipts.
These payments included corporate income tax, mineral royalties, employee income tax, and residual impost revenue. Additionally, the minerals sector became the country’s primary source of foreign exchange in 2022, surpassing revenue from crude oil exports, cocoa exports, and inward remittances.
The sector’s contribution to total merchandise exports also increased, surpassing the crude oil and cocoa sectors in terms of percentage.