The Ghana Chamber of Mines has drafted and submitted a proposal to government to introduce a sliding royalty regime between 4% and 8%, remove the Growth and Sustainability Levy, and add a 1% net-profit contribution to a community development fund.
The proposal aims to allow the state to benefit from the current surge in gold prices while avoiding long-term fiscal decisions based on what the Chamber describes as a short-term market cycle.
Speaking on Joy News’ PM Express Business Edition on Thursday, the Chamber’s CEO, Ken Ashigbey, said the industry supports fair taxation but cautioned against permanent policy choices driven by temporary price spikes.
“You see, eating on a constant and continual basis is better than eating one large meal once,” he said.
He warned against what he described as an “Esau mentality” in public policy.
“This phenomenon is a short-term phenomenon. You don’t take decisions that are long-term in nature just based on the phenomenon,” he said.
Mr Ashigbey explained that the proposal followed government’s draft legislative instrument on mining royalties. “When the LI came, we made an offer,” he said.
The Chamber’s counter-proposal seeks to replace the current structure with a flexible royalty system that adjusts to market conditions.
“Instead of now you sliding from where you are, slide down to 4% and slide up all the way to 8%,” he said.
Under the proposal, the Growth and Sustainability Levy would be removed entirely.
“We take GSL off, then slide between 4% and 8%,” he said.
He explained that the model allows royalties to rise during price booms and fall during price declines.
“When prices come down to a particular US$1,900, you then would do a 4%,” he said. “It’s not that you are only sliding up, but you’re sliding both up and down.”
According to him, the approach ensures fairness and sustainability for both the state and mining companies.
“It becomes more equitable and ensures that you are able to keep the wheels running,” he said.
The Chamber has also proposed an additional 1% contribution from net profits to support development in mining communities.
“One of the things that we believe should happen is that the people in these mining communities should be able to point to the fact that when the prices of gold hit the roof, we were able to do this project,” he said.
He said the fund would allow communities to see visible benefits during periods of high commodity prices.
“As part of our offer to government was to say that we would add a 1% that is taken off net profit and put that into a fund that we use for community development,” he said.
Ken Ashigbey stressed that the Chamber is not opposing taxation. “We are all open to fair taxation. That is something that we are not arguing about,” he said.
He argued that a flexible royalty system could generate stronger government revenues over time by supporting production growth.
“When you compute royalties, it is the price times your volumes times the royalty,” he said. “If you are able to keep the price up and still keep the royalties up, then what you would get on a sustainable basis would be better.”
He added that strong margins during high-price periods allow mining firms to expand output, which ultimately increases royalty inflows.
The Chamber also called for broader inclusion of the small-scale mining sector in national revenue mobilisation.
“Small-scale sector did more than half of what the large-scale sector did,” he said.
He noted that once engagements with regulators are completed and rates are properly structured, small-scale miners could also contribute.
“They would also be able to put a bit into the kitty,” he said. He argued that bringing both large- and small-scale operators into the framework would help government meet its revenue objectives more sustainably.
