Friday, June 22, 2018

GRA creates mining list to enhance revenue collection


Ghana Revenue Authority (GRA) is to create a mining list that will be reviewed annually to help in revenue collection and sustainability of businesses in the country.
Commissioner- General of GRA, Mr. Emmanuel Kofi Nti, said: “In the past, some items which have been included on the mining list had dual usages; items change in their nature and form and an annual review will create certainty in the minds of the mining industry and the GRA as an institution.
“We want to be as certain as possible, so an item which may be inclusive in our mining list and if it delays for about three to four years and its use has become a dual, then we may be looking at it as exclusive - but that may be deceptive.”
Mr. Nti explained that “the issue of having a regular review will bring us closer to the reality on usage of the items.
“Review will help in revenue collection, in that things which have changed and become dual may no longer be admitted; so that when we are given exclusive entitlement to the benefit we are very certain that the idea of dual application does not come up,” he explained.
“We want to make sure that a wholly exclusive and intensive use in the mining industry becomes a qualification for allowing an item onto the mining list,” he added.
The Commissioner General was speaking in reaction to an issue raised by Madam Maureen Balibi-Boye, Tax Manager at American Mining Services (AMS), “on duty issues, exemptions, import through the borders as well as associated high cost of doing business, which affect profit tax among others” when he visited the company with some officials from the GRA and Ghana Chamber of Mines at Tarkwa in the Western Region.
Still on the review of the mining list, the GRA boss said: “We want a situation whereby the pricing mechanism is complied with by the industry and is as real as possible; and that the industry knows it is up to date with the pricing mechanism on the international market.
“In this work that we are doing there are related party transactions, and so there are issues where items might have been sold and are also being sold at arm’s-length,” he said.
“As we deal with them and they know we are closely monitoring the environment there will be greater transparency, and when they report they can understand that there is no need for us to be arguing on some issues,” he added.
“We are here to acquaint ourselves with operations of the mine and its service companies; we want to move to best practices, and as revenue collectors we are here to see the reality on the ground. The processing is very revealing and it will bring us closer to them,” he concluded.
Chief Executive Officer of the Ghana Chamber of Mines, Mr. Suleman Koney, noted that the mining industry is largely misunderstood; and to create that understanding with the key stakeholders “we thought it wise to come with our top hierarchy, the Commissioner General and his team, to get a first-hand opinion of processes and facets of the mining industry.
“We believe through such engagement we will deepen the mutual trust and partnership. Coming to the source of the income which the country relies on largely is important,” he said.
Mining, he pointed out, is not about digging a hole in the ground but how to catalyse for development. “Until we build mutual trust between ourselves and the key stakeholders, particularly GRA, the mutual trust required to create that conducive environment for the industry to grow will not be there”.
He said: “It is my expectation that this engagement will continue and be deepened”.
The team visited the Ghana Manganese Company, Gold Fields Ghana Limited and Karl Tire as well as AMS.
About the mining list
The Minerals and Mining Act (2006), Act 703, does provide for the exemption of selected items from Customs duty to mining companies which is implemented through the Mining List.
All items on the Mining List attract a concessionary levy of 5% except plant, machinery and equipment for which no customs duty is paid. This provision is not peculiar to the mining industry. In fact, companies registered under the Free Zone in Ghana enjoy 100% duty exemption on all imports.
This concession is in recognition of the capital-intensive nature of mining investment. Applying the Customs duty of about 20% on such inputs will adversely affect the cash flow of the companies.
Although businesses generally pay Customs duty on their imports, this import is tax deductible. Exempting mining companies from Customs duty is therefore only a concession for managing their cash flows, and to allow the mining investment be realised and thereby generate socio-economic benefits from the country.

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