The government has announced plans to review tax exemptions for mining and oil and gas companies in Ghana after the Minister for Finance presented the 2023 Budget and Economic Statement in Parliament on Thursday (24 November).
Finance Minister Ken Ofori-Atta said: “As a first step towards expenditure rationalisation, the government has approved the following directives which take effect from January 2023:
“A freeze on new tax waivers for foreign companies and a review of tax exemptions for free zones, mining, oil and gas companies.”
Other measures are as follows:
Meanwhile, the Institute for Fiscal Studies (IFS) is projecting that Ghana could earn GHC20 billion annually from the extractive industry if all existing agreements in the sector were reviewed.
A comparative study carried out by the IFS showed that Nigeria earns 51% of all revenue from oil and Botswana earns 65% of the income from the diamond industry, while Ghana gets only 16% of the revenue from its extractives.
The policy think tank argues that Ghana is earning less because of existing contracts and production arrangements in oil, gas and mining.
Speaking with Nana Yaa Mensah on the Asaase Breakfast Show on 1 September, an economist and research fellow with the IFS, Adu Owusu Sarkodie, called for a national dialogue on reviewing the existing agreements.
“… We started on a wrong note … we entered into contracts as if we were giving our natural resources, which are a national asset, freely to the private sector: that ‘our asset is in your hand – go and mine the gold and come and render accounts to us’,” Dr Sarkodie said.