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Ghana delays windfall tax

Ghana “’ Africa’s
number two gold
producer “’ may
introduce windfall
Accra, Ghana — 13 September 2012 – The government of Ghana has delayed implementing a windfall tax on mining profits while it considers whether to scrap the proposed levy, according to the head of the country’s mining regulator.

Reuters reports that the West African nation, the continent’s second-largest source of gold, proposed the 10% windfall tax on mining companies’ profits in its 2012 budget as part of measures to boost income to state coffers.

The government also raised the corporate tax rate on miners from 25 to 35% for this year.

“There are areas we need to look at carefully to decide whether the windfall tax is the best way to go. It’s a complex tax and we are still weighing the options,” Ben Aryee, chief executive of the Minerals Commission told Reuters.

The International Monetary Fund last year recommended that Ghana, which is also the world’s number 2 cocoa grower and an oil producer, consider raising taxes or introducing new ones to increase revenues.

The Ghana Mine Workers Union had called for a windfall tax in addition to raising the country’s stake in mining projects to enable the economy to benefit from the soaring gold prices. The Chamber of Mines has publicly opposed the windfall tax, however, saying miners are already overburdened with high operational costs particular to the region.

Mining companies welcomed the re-evaluation of the tax.

Source: Reuters. For more information, click here.