The Africa Centre for Energy Policy (ACEP) has revealed in a new report that the government’s minimal revenue generation from the quarry industry emanates from underreporting of production volumes.
The Energy Think Tank indicated that this outcome was based on preliminary observations of the industry. However, it noted that several other problems plagued the sector including a skewed tax regime that focused on traditional minerals. Another reason is that it has a skewed mineral production monitoring regime that favours the quarrying industry, the report notes.
This comes at a time when the government has imposed new taxes on priority sectors already burdened with taxes.
While other industries are persistently volatile to commodity price shocks on the global market, the quarry industry is largely stable. The report highlights that augmenting the quarry industry has the potential to generate a relatively stable source of revenue to support government budget implementation.
Considering the foregoing, the report therefore recommended that the authorities; Ghana Revenue Authority (GRA) and Minerals Commission use remote monitoring technology solutions to improve their oversight of the quarries.
ACEP underscored that using more advanced tools in the industry would ensure accountability and transparency in the industry.
Still on the accountability and transparency front, the report indicated the need for the implementation of the Commissioner General’s invoices and receipts for transaction on all aggregates procured from the quarries.
Again, GRA should collaborate with local authorities who collect tolls from truck drivers on quarrying sites. It suggested that such collaboration would ensure data sharing from local authorities in order to serve the basis for estimating production volumes from quarrying sites.
Furthermore, the Minerals Commission should produce annual reports on the quarry industry, the report suggests.
Quarry production and revenue potential
According to the report, within a span of 7 years, total production volumes of quarry aggregates increased from 1.09million cubic metres in 2012. This volume increased to roughly 2.05 million cubic metres in 2015, after making a nosedive in 2017. It increased again reaching 4.1 million cubic metres in 2018.
Thus, within the seven-year period, the total production of quarry aggregates amounted to about 12.64 million cubic metres. This reflects an average production of about 1.8 million cubic metres per year
With such increasing volumes, the report indicates that it is attributable to the increase in the number of mining companies. While this shows improvement in the industry, revenue data from the Extractives Industry Transparency Initiatives (EITI) shows only small contributions from quarry.
“Ordinarily, this increase in activity should have an impact on direct revenue to government from the industry. At the barest minimum, royalty which represents a share of total production should increase.
“…The EITI report which presents the most available revenue data from the mining sector does not show any significant contribution from the quarry industry to government revenue.”
However, the report notes inconsistencies with data from the Minerals Commission. In 2018, total production increased to about 4.1 million cubic metres, a 400 per cent increase from 2017 production level. Yet, total revenue from quarrying only increased by 13 per cent, a huge shortfall in revenue.
From all indications, the sector is under taxed and under monitored, unlike the other traditional minerals.
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