Jinapor To Next Gov’t: Scrap VAT On Mining Exploration!

Mr Samuel A. Jinapor, the Minister for Lands and Natural Resources, has called for tax reforms to boost mineral exploration in Ghana and solidify the country’s position as one of the Africa’s top gold producers. This development, according to him, would foster sustainable growth in the sector.

He was speaking at the 10th Ghana Mining Industry Awards, held in Accra last week Friday, where he also lauded excellent relationship between him and the past three Presidents of the Ghana Chamber of Mines, as well as its CEOs.

“We have worked together, closely and in good faith, not only to overtake South Africa as the leading producer of gold on the continent, but we have consistently increased production, reaching some four million ounces (4,000,000 oz) last year.

“And with preliminary reports for the first half of this year showing production in excess of two million ounces (2,000,000 oz) from both large and small-scale mining, there is no doubt that we will exceed four million ounces (4,000,000 oz) this year.

“Through our collaborative efforts, the mining sector has remained the pillar of our national economy with consistent growth in export receipts. Last year, as of August 2023, gold alone had contributed some Four Billion and Six Hundred and Seventy Million US Dollars (US$4,670,000,000) in export receipts.

“This year, for the first half of the year alone, export receipts from gold reached Five Billion US Dollars (US$5,000,000.00) with a projection to exceed Ten Billion United States Dollars (US$10,000,000,000.00) by the end of the year,” he said.

The Minister,therefore, suggested to the next government to prioritise the removal of Value Added Tax (VAT) on mining exploration to support the growth of Ghana’s mining sector.

“The issue of VAT on exploration is very dear to us all, and indeed to the Vice President, Dr.Mahamudu Bawumia. Exploration drives the industry and we must incentivise it. Unfortunately, we could not finalise a review of this tax during my tenure, but I strongly recommend that the next government prioritises this matter,” he said.

He disclosed that during his tenure, the Ministry engaged stakeholders, including the Ghana Chamber of Mines, to address the tax burden, but could not conclude discussions due to challenges in Parliament.

The Minister also noted the importance of ensuring security for mines and urged industry players to invest in the development of mining communities as a way of fostering sustainable growth and security.

Mr Jinapor pledged continued government support for the industry and reiterated the importance of integrating mining with broader economic development.

“Our goal should be to maximise the sector’s potential by promoting local content, value addition, and linkages with other sectors of the economy,” he added.

With ongoing projects like the construction of Ghana’s first lithium mine and the commissioning of a US$450 million Manganese Refinery, the Minister expressed optimism about the future of the sector.

He, however, stressed that addressing VAT on exploration will be critical to sustaining the momentum.

The Ghana Mining Industry Awards, organised by the Ghana Chamber of Mines, have become a flagship event celebrating excellence and innovation in the sector over the last decade.

In an interview with Asaase News on the sidelines of the awards ceremony, the Chief Executive Officer of the Ghana Chamber of Mines, Sulemanu Koney commended the Minister for his collaborative leadership, highlighting the Chamber’s achievements under his tenure.

Koney lauded the ongoing expansion of local procurement policies, which have retained US$3 billion annually within Ghana’s economy. The CEO also shared insights into the Chamber’s role in increasing gold production, projecting that Ghana will exceed four million ounces in 2024, solidifying its position as Africa’s leading gold producer.

“The collaboration between the Ministry and the Chamber has been key to these successes. We remain committed to driving sustainable mining practices and enhancing local content,” Koney stated.

The awards event themed: “A Decade of Rewarding Excellence in the Mining Sector,” celebrated outstanding contributions to innovation, safety and sustainable practices within the industry.

The night saw individuals and companies recognised for their roles in driving Ghana’s mining sector as a cornerstone of the national economy.

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