Mining companies operating in Ghana are livid over the government’s inordinate delay in refunding surplus Value Added Tax (VAT) worth over GHc250 million to them, as at June 2014.
“We are asking the government, which is holding our GHc250 million to give it to us because the companies are going through challenges,” due to the recent dip in gold prices, the Chief Executive Officer of the Ghana Chamber of Mines, Sulemanu Koney, stated at a day’s workshop in Accra.
The workshop was organised by the Journalists for Business Advocacy (JBA), an offshoot of the Ghana Journalists Association (GJA), in collaboration with Ghana Chamber of Mines to update the members of JBA on happenings in the mining sector.
According to him, Section 27 of Legislative Instrument 1646 (VAT Regulations 1998) and relevant section of the Act 870 allows companies to charge interest at Bank of Ghana (BoG) discount rate, plus 0.2 of rate per day. Yet, these huge amounts due the mining companies have not been released, Mr. Koney added.
He recounted that players in the mining industry continue to suffer severe cash flow limitations which had worsened by the price fall, as well as escalation of cost engendered by the hike in fuel cost and curtailment in the supply of electricity in the country. The situation is not healthy for private sector development and only compounds the escalating cost of doing business in Ghana.
In recognition of the princely VAT arrears owed mining companies, the government announced a set of measures to address the long delays in repaying the companies. These measures, which were contained in the 2015 Budget, suggested that the government would abolish the use of VAT Relief Purchase Order (VRPO) and replace it with a credible refund system to cover duty drawback, VAT refund and corporate tax overpayments.
Also, it mentioned that the current VAT refund account, in which 5 percent of VAT revenue is paid, would be replaced with a general refund account into which up to 5 percent of GRA collection would be paid.
Mr. Koney, in a presentation on Ghana’s minerals economy – contributions, opportunities and challenges was hopeful that these measures would permanently redress the perennial delay of VAT to the mining companies.
These, the CEO of the mining chamber mentioned, include dysfunctional railway system and environmental degradation by illegal miners. The Executive Director of the Journalists for Business Advocacy (JBA), Suleiman Mustapha, called on journalists in the country to redouble their efforts in the coverage of mining sector.
Instructively, the JBA was established out of GJA’s special two-year project dubbed “Using the Media to Strengthen Business Advocacy”. The project, co-facilitated by KAB Consult and sponsored by the Business Advocacy Challenge (BUSAC) Fund, begun in 2006, under the theme “Using the Media to Promote Small-Scale Business Concerns.”
Under the project, a core team of journalists undertook capacity development in business advocacy to create a multimedia platform to discuss the concerns of business, particularly SMEs. In Ghana the SMEs account for 90 per cent of enterprises of the economy, contributing about 60 per cent of employment and about six per cent to GDP.
While the Ghana Chamber of Mines was incorporated in 1928, with the objective and among others to promote and protect the interests of the mining industry. The Chamber is a private non-governmental and voluntary organization representing the collective interest of its member-companies in Ghana.
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