A higher tax on the mining sector is justified – John Kwakye

The debate over the government's decision to increase the Growth & Sustainability Levy on mining companies from 1% to 3% continues, with contrasting views from economic experts.

Dr. John Kwakye, Director of Research at the Institute of Economic Affairs (IEA), supports the tax hike, arguing that the mining sector should be contributing even more. He suggests implementing a Super-profit or Windfall Tax of at least 10% to ensure Ghana maximizes gains from the sector, especially given rising global gold prices.

On the other hand, former Deputy Finance Minister Mona Quartey warns that the increased levy could place undue pressure on mining companies at a critical time. While acknowledging the need for revenue generation, she argues that prolonged taxation could negatively impact production costs and discourage investment in the extractive industry.

The government, led by Finance Minister Dr. Cassiel Ato Forson, justifies the levy hike as a necessary step to strengthen public finances, proposing to extend its application until 2028.

With the extractive sector playing a key role in foreign currency inflows and economic recovery, the discussion highlights the delicate balance between revenue generation and maintaining a competitive investment climate.