Industry body warns of investment flight, job losses under new tax regime
By Prince Ahenkorah
The Ghana Chamber of Mines has issued a carefully worded but pointed warning to government over proposed changes to the country’s mining fiscal regime and amendments to the Minerals and Mining Act, cautioning that the reforms could undermine the long-term viability of the sector and deter future investment.
In a policy brief presented by Chief Executive Ing. Dr. Ken Ashigbey during a press brief in Accra, the Chamber argued that while the mining industry remains a cornerstone of Ghana’s economy contributing over GHS 17.6 billion in fiscal revenue in 2024 and accounting for 58% of merchandise exports the sector’s sustainability is under threat from what it sees as overreach in fiscal policy.
At the heart of the Chamber’s concern is a proposed sliding-scale royalty regime tied to global gold prices. While the government sees this as a mechanism to capture windfall revenues during price booms, the Chamber warns it could push Ghana’s effective royalty rates beyond international norms, making the country less competitive and potentially triggering disinvestment.
Using Golden Star Wassa Limited’s 2024 financials, the Chamber estimates that the average effective tax rate could spike from 51% to 68% under bearish market conditions if the reforms are enacted.
The Chamber is also calling for the abolition of the Growth and Sustainability Levy (GSL), which it says compounds the already high fiscal burden on mining firms. Ghana’s current regime, which returns between 45% and 60% of mining profits to the state, is already among the most aggressive globally, combining gross revenue taxes such as royalties and the GSL with profit-based levies including corporate income tax and dividends.
While the Chamber supports aspects of the ongoing legislative review including the introduction of a medium-scale mining category and clearer timelines for parliamentary ratification of leases it opposes proposals to shorten lease tenures and abolish development agreements.
These, it argues, deviate from global best practices and risk eroding investor confidence. It is also pushing for the retention of international arbitration clauses and the extension of stability agreements to at least 10 years to provide predictability for long-term capital.
The Chamber’s intervention comes at a time when small-scale gold mining has overtaken large-scale production, accounting for 39% of national output by the end of 2024. However, the sector contributes less than 1% of mining-related tax receipts, raising concerns about fiscal leakage.
The Chamber insists that exploration despite its low conversion rate of 0.1% remains vital to the sector’s future and welcomed the government’s VAT exemption for exploration companies. Still, it flagged bureaucratic delays and high permitting costs as deterrents to new investment.
In a broader appeal, the Chamber urged policymakers to avoid using short-term commodity price rallies as justification for permanent fiscal changes, warning that rising operational costs often offset price gains. It also proposed earmarking a portion of net margins during high-price cycles for development funds to support host communities and national priorities.
The Chamber’s message is clear: Ghana’s mining sector is delivering record revenues, but its future hinges on a stable, competitive, and predictable policy environment. With the government eyeing new revenue streams amid fiscal pressures, the industry is bracing for a delicate balancing act between national interest and investor confidence.