Finance Minister Justifies Higher Tax For Mining Companies, Says It Is To Ensure Fair Contribution

The Ghanaian government has proposed increasing the Growth and Sustainability Levy on mining companies from 1% to 3% of their gross production.

Finance Minister Dr. Cassiel Ato Forson announced this measure during the presentation of the 2025 Budget to Parliament on March 11, 2025, stating that it aims to ensure that Ghana receives a fair share of the benefits from the recent surge in global gold prices. Additionally, the government intends to extend the levy’s sunset clause until 2028 to provide a stable framework for its implementation.

Deputy Finance Minister Thomas Ampem Nyarko further explained that this adjustment is necessary to capture more revenue from the mining sector, especially during periods of favorable global commodity prices. He emphasized that the levy targets large-scale mining companies and does not affect small-scale miners, who have seen the removal of the 1.5% withholding tax.

However, the mining industry has expressed significant concerns regarding the proposed increase. Sulemana Koney, CEO of the Ghana Chamber of Mines, criticized the lack of consultation and warned that the abrupt policy shift could erode investor confidence and impact the sector’s stability. Industry leaders argue that the levy, applied to revenue before cost deductions, could substantially affect profitability and make Ghana a less attractive destination for mining investments.

This development occurs against a backdrop of challenges in Ghana’s mining sector, including issues related to illegal gold mining, known locally as ‘galamsey.’ This practice has led to environmental degradation and significant tax revenue losses, with the state reportedly losing approximately $2 billion annually due to such activities.

In response, the government plans to establish a Gold Board to enhance gold purchases from small-scale miners, boost earnings, and reduce smuggling. This initiative aims to streamline the gold value chain and ensure ethical sourcing, contributing to increased benefits from gold sales and stabilization of the national currency.