The approval of a $259 million tax waiver for AngloGold Ashanti by Parliament has left the Minority unhappy.
The tax exemption which is expected to run until 2019, is to help make the company more profitable and generate more than GHS800 million for the Ghanaian economy.
Per the agreement, AngloGold will enjoy a $40 million tax waiver on royalties. A $2 million in income taxes have also been relinquished.
Also, AngloGold Ashanti is no longer required to pay GHS56 million in capital allowances due in 2020 and 2021, while a customs import duty to the tune of $161 million has also been waived.
But the Minority says the agreement is deficient and gives the mining company more than it deserves. Its Spokesperson on Finance, Cassiel Ato Forson is worried there is no guarantee Ghana benefit from the deal.
Mr Forson also questions why tax waivers are being handed out to a conglomerate like AngloGold.
“Why the discrimination, for a company with the strength of AngloGold Ashanti? Why are you reducing their tax exemptions to bring it down from 35 to 32.5 percent,” he queried.
Claims that the deal will allow AngloGold Ashanti to invest some GHS880 million in Ghana’s economy is moot, as there is no mechanism in place for government to monitor that investment, he argued.
“That is a major deficiency,” he lamented, adding “now they are taking home $259 million. You bring in GHS880 million and then you take away $259 million…for me, it doesn’t sound right. I think the tax exemptions they are giving to them are too much.”
Mr Forson says the government is reneging on its promise to cut down tax exemption, a situation the previous administration was critiqued over.
“So far taxes that they are giving away are so much”, he said.
But Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah disagrees.
He insists the deal will help revamp economic activity in Obuasi and its environments, adding that government has actually reduced the amount because the initial request was $270 million.
“For starters, the mine has been shut since 2014 so there is no activity going on. Following the passage of this tax concession agreement, we expect activity to begin in earnest.
“I’m sure people in Obuasi are jubilating now to speak to those who have been laid off, those who are sitting home and do not have jobs…and you will begin to appreciate this,” he told Joy News’ Joseph Opoku Gakpo.
Contrary to the Minority’s assertion that other mining companies are being discriminated against, Dr Assibey Yeboah said the current agreement is simply an improvement of the previous one of which Goldfields Ghana and Newmont Ghana Limited benefited.
He said comparing the agreement to existing ones and the gains Ghana stands to make, he has no doubt that Parliament has discharged its duties perfectly