The Ghana Chamber of Mines has rejected assertions by the Institute of Economic Affairs (IEA) that Ghana’s mining fiscal framework is outdated and overly dependent on royalties, describing the claims as inaccurate and misleading.
In a statement issued on April 20, the Chamber maintained that Ghana operates a comprehensive royalty–tax regime consistent with international best practice, rather than a royalty-only system. It explained that the sector is governed by multiple fiscal instruments, including mineral royalties ranging from 5% to 12%, a 1% Growth and Sustainability Levy (GSL), a 35% corporate income tax, and dividend income derived from the state’s 10% free carried interest in mining operations.
According to the Chamber, this combination ensures that the state captures value across different stages of the mining value chain, not solely through royalties. It therefore rejected suggestions that royalties constitute the dominant or exclusive source of government revenue from the sector.
The Chamber further indicated that the cumulative effect of these fiscal measures places Ghana among the highest-tax mining jurisdictions globally, with an effective tax rate approaching 60%. While it acknowledged the government’s recent decision to reduce the GSL from 3% to 1%, it argued that the adjustment does not sufficiently alleviate the overall tax burden on mining companies.
It cautioned that overlapping levies on gross revenue, particularly royalties and the GSL, could undermine competitiveness and, over time, diminish government revenue if not carefully structured.
‘Colonial relic’ claim disputed
Responding to the IEA’s characterisation of the fiscal regime as a “colonial relic,” the Chamber dismissed the description and noted that similar royalty–tax systems are widely applied in leading mining jurisdictions such as Botswana, Chile, and Burkina Faso.
On the question of mineral ownership, the Chamber clarified that Ghana retains full ownership of its natural resources. It explained that mining leases grant companies the right to extract minerals but do not transfer ownership from the state.
The Chamber also criticised proposals for the government to halt the renewal of mining leases, describing such measures as impractical and potentially harmful to the sector. It argued that this approach would effectively require the state to assume operational control of mining activities, which could deter investment and contradict efforts to expand indigenous participation.
Highlighting local involvement, the Chamber noted that Ghanaian nationals already own some large-scale mining operations, account for more than 55% of gold production, and are responsible for all bauxite and diamond output. Additionally, over 99% of employees in large-scale mining are Ghanaians, indicating strong local participation and skills transfer under the current framework.
Call for balanced reforms
The Chamber urged policymakers to strike a balance between revenue generation and long-term sector sustainability, warning that fiscal instability could discourage investment in the capital-intensive mining industry.
It further called for a broader review of the fiscal regime, including consideration of reducing the Growth and Sustainability Levy to zero, to enhance competitiveness and attract sustained investment. The Chamber emphasised that national benefit should be maximised not only through taxation, but also through continued production, investment, and value creation within the sector.
