Ghana government asked to amend law for mining companies to pay royalties monthly
- September 26, 2022
- Posted by: NA Global Realty & Investment Ltd.
- Category: Latest News
Civil society organisations and stakeholders in the mining sector have called on the Ghana government to enact a legislation that would compel mining companies to pay royalties on monthly basis instead of the quarterly payment.
At a stakeholder’s engagement organised by the Ghana Extractive Industry transparency Initiative (GHEITI), Dr Steve Manteaw noted that negotiations have been ongoing to amend the law to compel mining companies to pay royalties on monthly basis, but that has not been finalised
“The regulation has to be amended to give effect to the directive for mining companies to pay their royalty on monthly basis,” he stated.
Research indicates that only two mining firms have taken up the task to pay royalty on monthly basis.
These include Newmont Gold Ghana and Anglogold Ashanti. The amount of royalties paid by mining companies depends on the gross revenue realised from the sale of the mineral product by the mining Company. The Minerals and Mining Amendment Act 794 puts the royalty rate application at 5% of gross revenue of minerals.
Minerals and mining operations Tax (Mineral Royalty) is imposed on income of firms engaged in mineral operations. Subject to any fiscal stability agreement, the mineral royalty rate is 5% of the total revenue earned from mining operations..
Mineral Rights Payments, other fees and Licences and Property rates are used by the Recipient Agencies that is Minerals Commission and District Assemblies respectively as Internally Generated Funds.
Mineral Royalty is first paid into the Minerals Income Investment Fund. 20 percent of the mineral royalty receipts is thereafter released to the Minerals Development Fund and the OASL.
Ground Rent is received by the OASL and distributed in accordance with Article 267(6) of the 1992 constitution. That’s 25 percent to stools; ii. 20 percent to Traditional Authorities within the area of authority of which the stool lands are situated; and iii. 55 percent to the District Assemblies.
The benefits of monthly payment of royalties by mining companies to government are that they will help in quick distribution to all stakeholders in the industry especially mining communities to enable them continue with their developmental programs. Government will also have access to adequate funds to develop infrastructure.
By Kwabena Adu Koranteng