The Ghana Chamber of Mines has warned that VAT on exploration and new levies could cripple the mining sector, driving investment to Kenya and Côte d’Ivoire.
Acting Chief Executive of the Chamber, Ahmed Dasana Nantogmah, raised alarm over the government’s decision to impose a Value Added Tax (VAT) on exploration activities and a 3% levy on gross mineral production. These policies, he said, are counterproductive and could drive smaller exploration firms out of Ghana and into more investor-friendly countries like Côte d’Ivoire and Kenya.
“Exploration is the lifeline of mining. Now there’s VAT on exploration.
“Most of the companies in that space are risk takers, but they are paying VAT on assay and drilling, which is the highest cost of exploration.”
Ahmed Dasana Nantogmah, Acting Chief Executive of the Chamber
Exploration, by nature, is high-risk with uncertain returns. Mr. Nantogmah explained that exploration companies invest millions of dollars without guaranteed success, and taxing these early activities compounds the financial burden.
“You can imagine putting $10 million into exploration, making no discovery, and still paying VAT on that failed attempt.
“That VAT will not be refunded. It’s money thrown down the drain.”
Ahmed Dasana Nantogmah, Acting Chief Executive of the Chamber
He noted that while these companies may not generate revenue for years, the imposition of upfront taxes on core exploration functions like drilling and assay only serves to discourage investment in new mining projects.
Shift in Investor Interest
The Chamber observed a worrying trend: smaller firms—responsible for much of the greenfield exploration—are beginning to relocate their operations to countries with more favourable tax policies.
“These companies are small. They don’t have deep pockets.
“That’s why they go to places like Kenya or Ivory Coast, where they don’t pay this VAT. So, you’ll see a movement of exploration companies going there.”
Ahmed Dasana Nantogmah, Acting Chief Executive of the Chamber
This shift, he warned, could have a lasting impact on Ghana’s mining sector. Without new exploration, there will be no new mines, meaning fewer jobs, reduced exports, and a shrinking contribution of mining to GDP in the years ahead.
Historically, Ghana has enjoyed a reputation as one of Africa’s leading mining investment destinations.
But according to the Chamber, this reputation is now under threat due to an increasingly burdensome tax regime that lacks a long-term development perspective.
“We’re losing to Kenya and Côte d’Ivoire because of bad tax policy. No exploration today means no new mines tomorrow.”
Ahmed Dasana Nantogmah, Acting Chief Executive of the Chamber
The Chamber is urging the government to reconsider the VAT policy and explore alternative fiscal frameworks that encourage rather than punish investment in exploration.
Stakeholders argue that taxing companies before they find commercially viable resources undermines the entire value chain of the mining industry.
Call for Strategic Reform
The implications of these policies extend beyond the mining companies themselves. Reduced exploration means lower future production, which ultimately translates into fewer royalties, taxes, and foreign exchange earnings for the state.
It also risks eroding employment opportunities and limiting the country’s ability to capitalise on high-demand minerals such as gold, lithium, and manganese.
Mr. Nantogmah added that the 3% gross production levy is particularly punitive during times of price volatility.
Since the levy is based on output rather than profit, companies are forced to pay even when commodity prices drop and profit margins shrink.
“It’s a fixed cost that doesn’t take into account market fluctuations.
“At a time when we should be supporting the sector to remain globally competitive, we are driving investors away.”
Ahmed Dasana Nantogmah, Acting Chief Executive of the Chamber
The Chamber of Mines is calling for an urgent policy review and broader consultation with stakeholders, including exploration firms, international investors, and development partners.
As Ghana seeks to position itself as a mining hub in the energy transition era, experts say a forward-looking fiscal regime will be critical. Without it, the country risks falling behind its African peers and missing out on significant economic opportunities.
