Financial Expert Advocates For Tax Credit Scheme

By Esther Awuah

Samuel Adam, Executive Director of Integrity and Excellency International, a management and financial consultancy firm, has called on government to adopt the Tax Credit Scheme (TCS) to facilitate the development of infrastructure in mining communities.

TCS scheme allows government to use Resource Developers as “Contractors” to implement infrastructure projects without appropriation from the Treasury.

Mr. Adam explained that “with the scheme, approved government projects are funded, managed and implemented by the developer and expenditure thereof set-off against tax payable by the developer/company for the year.”

He noted that when adopted the TCS would help address the growing discontent among the youth, chiefs and communities in resource development areas for lack of infrastructure development.

He added “the general perception that the country is not getting its fair share of benefits from the exploitation of its abundant mineral, oil and gas resources would be eliminated if the TCS is effectively adopted.”

Mr. Adam was speaking at the 2nd Mining for Development forum organized by the Ghana Chamber of Mines in Accra on the theme, ‘Mining for Development: Thinking outside the box.’

Dr. Tony Aubynn CEO Chamber of Mines 

In his address, Dr. Toni Aubynn, Chief Executive Officer (CEO) of the Ghana Chamber of Mines, stated that the absence of a national mining vision and policy over the years has also contributed to the perception that mining communities are not receiving enough of developmental projects.

He said despite the huge taxes that mining companies pay to government they are committed to ensuring that host communities and the country as a whole benefit from the rich resource.

The mining industry in 2011 contributed about $540 million to the Ghana Revenue Authority, representing 27.61 percent of total Internal Revenue collections in 2011.

According to Dr. Aubynn, the sector voluntary contributed an amount of about $27 million to their communities and the general public.

He indicated that “companies returned about $3.1 billion, representing 75 percent of their mineral revenue through the Bank of Ghana (BoG) and the Commercial Banks in 2011 against statutory requirement of 25 percent. About 80 per cent of all mineral proceeds are retained by the Central Government and less than 10 per cent goes to mining communities.”

He said mining revenue and royalties go directly into the Consolidated Fund thereby making it difficult to effectively track the revenue.

He therefore called for collaborative effort by stakeholders in the mining industry to ensure that mining projects and developmental programmes are properly communicated to the populace.