Mines Chamber pushes for VAT exemption on drilling and laboratory services

The Ghana Chamber of Mines is urging the government to consider exempting exploration companies from paying Value Addedtax (VAT) on large expenditures such as drilling and laboratory services.

This, the Chamber says will help these companies not only to reduce their cost but also help drive investments into the sector.

The President of the Chamber, Mr Kwame Addo-Kufuor,in making a case for the mining companies at the 88th annual general meeting in Accra said, an incentive scheme would help attract the required investments and ensure that the country continues to benefit from its mineral endowments at all times.

“As a first step, the government could consider exempting exploration companies from the payment of VAT on big ticket expenditure such as drilling and laboratory services,” he said.

He added, “Such a measure would not only reduce the pecuniary cost borner by these companies but also stem the drift in investment into neighbouring countries and thereby restore or enhance the country’s image as a competitive destination for investments.” 

The AGM was on the theme,”Sustaining mining and power investment: Meeting stakeholder expectations in a challenging global environment.”

Minerals sector in 2016

According to Mr Addo-Kufuor, the price of gold is expected to remain under pressure for most part of 2016 as the United States (US) Federal Reserve Bank eases its quantitative monetary programme.

This he said, was likely to trigger a rise in interest rates of near money assets and investors were likely to redirect thier portfolio away from gold.

“On the contrary, the general decline in global gold output, which is also expected to trend in 2016, could moderate the impact of the “lift off”in the US. In the Ghanaian context, fresh output from Asanko mine and Golden Star Wassa’s underground mine is expected to increase the gold industry’s output in 2016, all things being equal,” he said. 

Sustaining mining investments

The Minister for Lands and Natural Resources, Nii Osah Mills said government acknowledges that investments into the mining sector must not only be attracted, but must be sustained to act as a catalyst for the growth of business to generate resoruces that beneft all stakeholders.

“It is for this reason that government will continue to collaborate with the Chamber to address the thorny issues that have the potential to destroy all gains made,” he said. 

The country, he said, was endowed with a lot of minerals including iron ore, Columbite- Tantalum, Limestones, Clay Minerals, SOlar Salt, Silica Sand and Granite that could be exploited on a larger scale.  

The Chief Executive Officer of the Chamber, Mr  Sulemanu Koney commended the Journalists for Business Advocacy (JBA) for their advocacy efforts and ensuring that concerns of the member companies were brought to the fore.