Finance Minister defends 3% Growth and Sustainability Levy on  mining companies…. but Minority opposesHello world!

By Eugene Davis

The Minister of Finance, Dr.Cassiel Ato Forson, has justified parliament’s passage of the three percent increase in the Growth and Sustainability Levy on gold mining companies, arguing that the nation stands to gain significantly from this tax due to the continuous rise in gold prices.

The Growth and Sustainability Levy (Amendment) Bill, 2025 seeks to raise the levy imposed on gold mining companies to 3% of gross production, while other mining companies and upstream oil and gas companies will pay 1%. Additionally, the bill extends the sunset clause to 2028.

According to the finance minister, the country aims to capitalize on the high gold prices.

“Unfortunately, Ghana has not fully benefited from the significant increase in gold prices. This bill seeks to change that by ensuring the nation takes advantage of the ongoing and projected rise in gold prices so that we can maximize our gains from our natural resources,” he stated.

He further emphasized that it is only fair for Ghana to benefit from this levy, urging Parliament to support the bill in order to align with rising global gold prices.

“I have engaged with several mining companies, and I believe that, while we introduce this tax to generate additional revenue for the state, Ghana must also develop a proper taxation regime to effectively capture the economic rent that accrues from the sector,” he added.

He also pointed out that Ghana is not the first country to implement such a tax, citing international examples.

*”Many countries have introduced taxation on economic rent, but Ghana has yet to do so. For instance, South Africa has taxation mechanisms in place to take advantage of these revenues.

In the case of oil revenues, we have embedded windfall taxes in our petroleum agreements. However, when it comes to mining, we lack such a taxation structure. What we are trying to do now is ensure Ghana benefits from this opportunity,”* Forson explained.

Minority criticizes calls for resource rent tax

Ranking Member on Finance, Dr. Mohammed Amin Adam, has raised concerns about the impact of the proposed Growth and Sustainability Levy on mining companies, arguing that it will effectively increase their royalty payments to 8%, despite existing mineral agreements setting the rate at 5%.

“By doing this, you are distorting the fiscal regime that underpins the assumptions governing these mineral agreements,” he stated.

Dr. Amin Adam emphasized that if the Finance Minister intends to impose a windfall tax, he should follow the appropriate legal framework.

“We have advised the minister that if he wants to tax windfall profits, he should do so properly. He should amend the Minerals and Mining Act to include a resource rent tax, allowing for the renegotiation of mineral agreements and the proper collection of such taxes without disrupting the existing fiscal regime. Using a tax mechanism outside the mineral agreements is not the right approach,” he argued.

He further insisted that the Finance Minister should introduce a resource rent tax within the Minerals and Mining Act, which would provide a proper legal basis for taxing mining companies.

“He cannot impose a tax outside the mineral agreement. This creates uncertainty for investors in the industry. It distorts the market, and as a result, investors may be discouraged from coming to Ghana,” Dr. Amin Adam warned.

Additionally, he stressed the importance of a balanced tax system that ensures both the government and mining companies achieve economic equilibrium.

“If you fail to do this and instead distort the tax system—particularly the mineral agreements—you undermine the assumptions that govern these agreements,” he stated.