The Bank of Ghana (BoG) has made a fresh appeal for Ghana to eliminate stability agreements in the mining sector in order to increase revenue accruing to the country.
According to the central bank, the practice where the tax obligations of mining companies are waived for investment purposes, denies the country from some benefits.
The Second Deputy Governor of the Bank of Ghana, Dr. Johnson Asiamah is confident of an increase in economic gains if stability agreements are stopped. He made the remarks at this year’s Ghana Mining Industry Awards.
“Despite our aversion to the existing stability agreements, the mining sector continues to repatriate significant amounts of export earnings…I am indeed looking forward anxiously to the day we will do away with stability agreements and the same time obtain hundred percent repatriation even though the current repatriation is commendable,” Dr. Asiama stated.
Ghana’s stability agreements regime, allows the companies to pay a fixed tax and royalty rate for a specified period of time. Some agreements that have already been reached involved mining giants such as Newmont and Anglogold.
But a recent decision by the Ministry of Finance to grant tax concession to Goldfields Ghana Limited following the company’s 500 million dollars investment has been heavily criticized.
The Third World Network had insisted that the basis for granting the tax concession was unjustifiable as the regulation was not expected to take a retrospective effect.
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