The Ghana Chamber of Mines has pushed back against claims by the Institute of Economic Affairs (IEA) that the country’s mining fiscal framework is outdated and overly reliant on royalties, describing the characterisation as inaccurate and misleading.

In a statement issued on April 20, the Chamber argued that Ghana operates a royalty–tax regime, not a royalty-only system, stressing that the current framework aligns with global best practice in the management of mineral resources.

According to the Chamber, Ghana’s mining sector is governed by a combination of fiscal instruments, including mineral royalties ranging between 5% and 12%, a 1% Growth and Sustainability Levy (GSL), a 35% corporate income tax, and dividend flows from the state’s 10% free carried interest in mining operations.

“These instruments ensure that the state captures value at different stages of the mining value chain, not just through royalties,” the statement noted, adding that it is therefore incorrect to suggest that royalties are the sole or dominant source of revenue from mining.

The Chamber further disclosed that the cumulative effect of these fiscal measures places Ghana among the highest-tax mining jurisdictions globally, with an effective tax rate approaching 60% under current conditions.

While acknowledging government’s recent decision to reduce the Growth and Sustainability Levy from 3% to 1%, the Chamber said the adjustment, though appropriate, does not sufficiently ease the overall burden on mining firms.

It warned that overlapping taxes on gross revenue—such as royalties and the GSL—could undermine competitiveness and, in the long term, reduce government revenue if not carefully calibrated.

‘Colonial relic’ description disputed

The Chamber also rejected the IEA’s description of the fiscal regime as a “colonial relic,” insisting that the royalty–tax model is widely used across leading mining jurisdictions, including Botswana, Chile and Burkina Faso.

On the issue of mineral ownership, the Chamber clarified that Ghana has not ceded control of its natural resources to investors, explaining that mining leases grant only the right to mine and do not transfer ownership of minerals from the state.

The industry body further criticised proposals for government to halt the renewal of mining leases, describing the suggestion as economically damaging and impractical.

It argued that such a policy would effectively require the state to take over all mining operations, a move it said could undermine investment and contradict efforts to expand indigenous participation in the sector.

Highlighting local involvement, the Chamber noted that Ghanaian nationals already own some large-scale mines, account for over 55% of gold output, and are responsible for all bauxite and diamond production. Additionally, more than 99% of employees in large-scale mining are Ghanaians.

These indicators, it said, demonstrate that the benefits often associated with state-led mining models—such as local participation, skills transfer and value addition—are already being achieved under the current framework.

Call for balanced reforms

The Chamber urged the government to strike a balance between revenue mobilisation and sector sustainability, cautioning that fiscal instability could deter investment in a capital-intensive industry.

It also renewed calls for a broader review of the fiscal regime, including a possible reduction of the Growth and Sustainability Levy to zero, to safeguard long-term competitiveness and investment.

“The objective should be to maximise national benefit not only through taxes, but through sustained production, investment and value creation,” the statement added.