Mining Sector Hit with Higher Taxes – Deloitte Expert Warns of Impact
A Senior Manager at Deloitte Ghana, Joachim Owusu Afriyie has cautioned that the government’s decision to increase the Growth and Sustainability Levy for the mining sector from 1% to 3% on gross production could have significant financial implications for mining companies.
Speaking on Business Breakfast on ZED, Afriyie explained that while the government seeks to boost revenue through the 2025 National Budget, the new tax measure could negatively impact the cash flow and profitability of mining firms due to their high cost of production.
“If you are taxing 3% of their gross earnings, that can significantly affect their operations, especially given the high production costs in the sector,” he noted.
Ghana’s mining industry already operates under a 35% corporate tax rate, one of the highest in the country. Afriyie acknowledged that the government may have engaged mining firms before introducing the levy increase but expressed concern about its potential effects on industry players.
He further noted that several mining agreements signed with the government contain stability clauses, which prevent certain companies from being affected by new tax policies. He expressed hope that authorities had carefully assessed which companies would be impacted and the expected revenue the new tax would generate.
The mining sector remains a key contributor to Ghana’s economy, providing jobs, foreign exchange earnings, and significant tax contributions. However, industry players have frequently called for stable and predictable tax policies to ensure long-term growth and investment. As the government moves forward with implementing the levy increase, stakeholders in the mining sector are expected to respond in the coming days, weighing the potential impact on investment, production, and profitability.
