|NCOM's response to Review of Ghana's Mining Regime|
|Written by members of NCOM|
|Wednesday, 06 June 2012 12:37|
The National Coalition on Mining (NCOM) has long advocated for the review of Ghana’s mining regime and the stability and development agreements contained in the Minerals and Mining Act 2006 (ACT 703), as well as the renegotiation of investment agreements with individual mining companies.
Our advocacy for review of these has been informed by the marginal benefits derived from mining including:
1. The regime and related clauses in the law generally provide opportunities for leakages.
2. Social concerns, including the inability of the state to provide social services such as health, education, roads etc.
3. Inability of the Government to impose and collect new taxes, including royalty and profit taxes on mining companies with stability and development agreements.
4. Inability of the industry to expand and create linkages and jobs
5. Disproportionate share of mining revenue between mining companies on one hand and government and local communities on the other.
6. Inadequate transparency and participation in investment negotiation processes.
The current fiscal regime was designed to attract foreign direct investment and the key instrument used included the provision of large percentage (up to 80%) of capital allowance, exemption of custom and excise duties on mining equipment, guaranteed offshore retention of earnings, carry forward of losses for a period not less than 5 years, and removal of windfall taxes. In the review of PNDC Law 153 (1986) a stability and development agreement provisions were made in the current Minerals and Mining Law. Perhaps these were necessary at the time the economy was in serious distress and needed capital injection. The circumstances of today do not require these incentives in the scope, form and structure as they were over twenty years ago.
To download the letter by NCOM to the committee reviewing Ghana's mining regimes, kindly click here: http://documents.twnafrica.org/NCOMletter-miningagcommittee.pdf
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