taxation of mining companies in ghana
TAX BRIEF IN THE MINING SECTOR OF GHANA
1.0 Introduction
The mining sector is one of the major extractive industries in Ghana. It is estimated that the sector contributes about 41% of total export earnings and 5% of Ghana’s GDP. The sector is dominant with Foreign Direct Investment (“FDI”) with little local participation.
1.1 Legal Framework
The Fiscal Regimes that regulate the sector in Ghana are:
The Minerals and Mining Act, 2006 (Act 703) as amended
The Internal Revenue Service Act,2000 (Act 592) as amended
The Internal Revenue Regulation, 2001 (L.I. 1675)
The Value Added Tax Act, 1998 (Act546) as amended
Conducting mining activities in Ghana requires that the investor to establishes a business presence in Ghana through incorporation or branch registration in Ghana in accordance with the Companies Act, 1963 (Act 179). Other registration requirements are registration with the Ghana Revenue Authority (“GRA”) for the Taxpayer Registration Number (TIN) and the Minerals’ Commission for Mineral Right and Mining Lease Licenses.
2.0 Mining Operations in Ghana
2.1 Capitalisation of Expenditure
In the conduct of mining business, a mining enterprise shall be entitled to capitalisation of all expenditure on reconnaissance and prospecting that are wholly, exclusively and necessarily for the conduct of mining business.
2.2 Acquisition of Carried Interest
The government shall acquire ten percent free carried interest in the rights and obligations of the mineral operations in respect of which financial contribution shall not be paid by Government. This does not preclude the Government from any other or further participation in mineral operations that may be agreed with the operator.
2.3 Stability Clause
Mining enterprises that are granted mining lease license may enter into a stability agreement with the government of Ghana where such entity shall not:
i. for a period not exceeding fifteen years from the date of the agreement, be adversely
1.0 Introduction
The mining sector is one of the major extractive industries in Ghana. It is estimated that the sector contributes about 41% of total export earnings and 5% of Ghana’s GDP. The sector is dominant with Foreign Direct Investment (“FDI”) with little local participation.
1.1 Legal Framework
The Fiscal Regimes that regulate the sector in Ghana are:
The Minerals and Mining Act, 2006 (Act 703) as amended
The Internal Revenue Service Act,2000 (Act 592) as amended
The Internal Revenue Regulation, 2001 (L.I. 1675)
The Value Added Tax Act, 1998 (Act546) as amended
Conducting mining activities in Ghana requires that the investor to establishes a business presence in Ghana through incorporation or branch registration in Ghana in accordance with the Companies Act, 1963 (Act 179). Other registration requirements are registration with the Ghana Revenue Authority (“GRA”) for the Taxpayer Registration Number (TIN) and the Minerals’ Commission for Mineral Right and Mining Lease Licenses.
2.0 Mining Operations in Ghana
2.1 Capitalisation of Expenditure
In the conduct of mining business, a mining enterprise shall be entitled to capitalisation of all expenditure on reconnaissance and prospecting that are wholly, exclusively and necessarily for the conduct of mining business.
2.2 Acquisition of Carried Interest
The government shall acquire ten percent free carried interest in the rights and obligations of the mineral operations in respect of which financial contribution shall not be paid by Government. This does not preclude the Government from any other or further participation in mineral operations that may be agreed with the operator.
2.3 Stability Clause
Mining enterprises that are granted mining lease license may enter into a stability agreement with the government of Ghana where such entity shall not:
i. for a period not exceeding fifteen years from the date of the agreement, be adversely