The Ghana Chamber of Mines has warned that a proposed increase in gold royalties could severely harm the sector if implemented hastily. Ken Ashigbey, CEO of the Chamber, cautioned that rushing the increase – from the current 5% to a potential 11% – to Parliament without sufficient stakeholder engagement would be detrimental.

Speaking on Joy FM’s Super Morning Show on Wednesday, Ashigbey explained that Ghana already has one of the highest effective tax rates for gold miners in Africa. He stated, “Even with the 5% royalty, our effective tax rate is about 50% when you include royalties, corporate income tax, and government dividends. Increasing this could seriously affect the sustainability of the industry.”

He drew comparisons with other mining nations in West Africa, including Nigeria, Burkina Faso, Mali, and Côte d’Ivoire, highlighting that Ghana’s current tax burden is comparatively high. The proposed increase, he added, would be linked to the prevailing world price of gold.

Ashigbey acknowledged the government’s need for increased revenue but stressed the importance of balancing this with the long-term health of the gold mining industry. “So far, we’ve had one engagement with the Minister, and the government has shared its position. But rushing this to Parliament within 21 days, without thorough consultation, risks shooting ourselves in the foot,” he said.

The Chamber is advocating for a more collaborative approach to ensure that any revisions to the mineral royalty framework are both beneficial to the government and sustainable for the industry. “We need a constructive conversation around this to find the sweet spot that guarantees government revenue but allows the industry to continue providing the resources needed for national development,” Ashigbey urged.

Image Source: MYJOYONLINE