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President of the Ghana Chamber of Mines (GCM), Kwame Addo-Kufuor has bemoaned the inability of its member companies to recover VAT refunds, which continue to be a major drain on their cash flow, especially in the wake of high inflation and significant depreciation of the local currency.
According to him, statistics from the member companies showed that mining companies were owed GH¢279,367,251.00 in VAT refund as at December 2016.
Mr Addo-Kufuor revealed this during the chamber’s 89th Annual General Meeting (AGM) in Accra recently.
According to him, the outstanding VAT Refund had effectively become a debt, compounding the challenges of GCM member companies.
He also said that even though government had attempted to address such challenges by allocating additional funds into the refund account, the problem still persists.
Furthermore, he said the current state of affairs had worsened due to the government’s decision to stop the issuance of Treasury Credit Notes (TCN), which could be used to offset other liabilities.
“We are hopeful that the expected set-off as envisaged in the Revenue Administration Act 2016 (Act 915) will be realized as soon as possible to bring relief to our industries.”
On local content, Mr. Addo-Kufuor announced the chamber’s plan to launch an online portal on local content to provide an in depth information on mining inputs required by its members through which local manufacturers and suppliers would be invited to bid.
The portal, he said, would be launched this year to support potential investors and local entrepreneurs who can provide the needed inputs with up-to-date and specific information to further enhance the implementation of the local content regulations.
Mr Addo Kufuor also indicated that the total direct employment created by the producing companies stood at 11,628, representing about 16 percent increase over the 2015 recorded figure of 9,939.
Out of the present figure, he said, over 98 percent were Ghanaian nationals, which further buttressed the commitment of member companies to make mining more relevant.
He made reference to data from Thomson Reuter’s GFMS survey, which indicated that Ghana’s gold output was largely unchanged at 95.0 tonnes in 2016 relative to 95.1 tonnes in 2015.
“Further statistics from the country’s fiscal authority, Ghana Revenue Authority (GRA) shows that the mining and the quarrying sector recaptured its position as the leading source of direct domestic revenue after being displaced by the Financial and Insurance Sector in 2015. Total fiscal receipts attributable to the mining and the quarrying sectors increased from GH¢1.35 billion in 2015 to GH¢1.65 billion in 2016, representing a growth of 22 percent.”
The foregoing, he said, comprised payments of GH¢399.9million, GH¢696.9 million, GH¢550.7 million and GH¢0.54 million in PAYE, Corporate Income Tax, Royalties and other taxes respectively.
Producing member companies of the chamber returned $2.30 billion out of realized mineral revenue of $3.25 billion into the country, representing 70.9 percent.
The producing mines spent $1.01 billion on purchases of goods and services in the country, representing 31 percent of realized mineral revenue.
This, he said, exceeded the 2015 figure of $865 million and these consecutive increases in spending on goods and services showed the chamber’s commitment in promoting local content in the mining industry.
Source: Daily Guide