Home   >   Business   >   Business News   >   201110
Govt Goes After Mining Companies   
 
  << Prev  |  Next >>
 
28-Oct-2011  
Comments ( 0 )     Email    Print
       
 
 
 
Dr. Joseph Kwadwo Asenso, 2nd left, Dr. T. O. Antwi-Asare, left in a chat with other stakeholders during the seminar.
 
 
Related Stories
 
Government has set up a taskforce that will pressurize mining companies to honour all their tax obligations.

The taskforce, headed by Professor Newman Kwadwo Kusi, an advisor at the Ministry of Finance & Economic Planning (MoFEP), is expected to retrieve revenue lost in the mining sector.

It will be tracking mining companies who deliberately sell out after enjoying tax holidays and pay low royalties to government.

Dr. Joseph Kwadwo Asenso, an economist at the Ministry of Finance & Economic Planning (MoFEP), who disclosed this on Tuesday at the University of Ghana Economics Students’ Society Seminar in Accra, noted that though the law provides that mining companies in the country should pay six percent of royalties to the state, most companies paid three percent.

He noted that through negotiations and dialogue, government has succeeded in raising the percentage being paid by the mining companies to five percent, stressing that most of the mining companies were still not paying up to the maximum percentage.

“We are also employing ways to overcome the challenge of capital gain lost because some of the companies come and gain profit just when we are about to tax them, they sell and then go away”.

According to Dr. Asenso, the low domestic revenue is as a result of the low tax holidays, tax exemptions, among others.

On the grant element, he said the problem has always been with the non-release of duly budgeted for committed funds by Development Partners for a variety of reasons. Some of these include government’s inability to meet certain triggers in the agreements it has with them.

This has led to some projects being left hanging or abandoned altogether owing to lack of funds.

“As of August 2011 provisional unreleased grants amounted to GH 407, 250, 611, grant disbursements fall short by between 30 and 40 percent annually with 80 percent of project loans being released offshore.

“Coupled with the problem of low revenue inflows is high government expenditure which leads to fiscal deficits. The wage bill for 2010 was 28.83 percent of the expenditure budget with statutory/transfer payments accounting for 18.33 percent of same.

Provisional August 2011 puts personal emoluments at 48.3 percent of domestic tax revenue leaving a very little fiscal space to take care of other equally important sectors of the economy.

As of August 2011 (provisional), total expenditure accounted for 13.6 percent of GDP with a projected outturn of 23.8 percent, Dr Asenso noted, adding: “The low revenue inflows and the high share of statutory payments leave very little room for fiscal maneuverings. This makes it difficult for the fiscal authority to exert its management capacity on the economy.”

Sylvester Wullo Bagooro, an economic policy analyst and programmes officer of TWN-Africa, speaking on topic, “Ghana’s Development in the 21st Century – The Role of Trade Policy and Practice,” stressed the need for government to come out with policies that will promote local industries.

“This is the only way the youth could gainfully be employed in the country.”

The Chairman for the occasion, Dr. T.O. Antwi-Asare, in a closing remark, reiterated that it was time for government to embark on strategies that will provide more revenue to the economy as dependence on donor all the time will never help the economy.
 
 
Source: Stella Danso Addai
 
 

Comments ( 0 ): Post Your Comments >>

 
 
 
Disclaimer: Opinions expressed here are those of the writers and do not reflect those of Peacefmonline.com. Peacefmonline.com accepts no responsibility legal or otherwise for their accuracy of content. Please report any inappropriate content to us, and we will evaluate it as a matter of priority.
 
 
Featured Video