Mining companies reject ground rent fee

By: Yaw Sarpong, Daily Express

Mining companies, operating in the country have rejected the initial Ground Rent (concession rate) fee of GHc36.50 per acre, fixed by a committee, which was tasked to review the fee.

Daily Express gathered that the last time the rate was reviewed was in 1986. The rate was then five thousand cedis (₵5000).

With the redenomination of the cedi, that translates into 50Gp per square kilometer.

 In an interview with Dr. Gad Akwensivie from the Office of the Administrator of Stool Lands,  he indicated that it was a big problem for the mining firms in paying the 50Gp.

He stated that the mining companies were finding it difficult in paying that amount, simply  because the firms were raising a number challenges. But he indicated that their reasons were justifiable.

He mentioned the cost the cheque booklet been more than fifty pesewas, the cost of postage was also more than fifty pesewas, and they also argued that travelling to Office of the Administrator of Stool Lands to pay was waste of time, as far as the mining companies were concerned.

Dr. Akwensivie disclosed this to Daily Express after training of Financial Journalists on the extractive industry held in Koforidua in the Eastern region. The training was organized by GIZ in partnership with Institute of Finance Economic Journalists (IFEJ)

According to him, ‘these together with other reasons were the main reason why the mining companies did not find it wealthy to pay that concession rent.’

However, the land owners were agitating as to why a mining company will pay 50Gp per a square kilometer. 

“Because of the concerns of the land owners, a committee was formed, comprising a number of institutions including the Minerals Commission, Ministry of Finance, the Land Division of Lands Commission, the Land Valuation Division of Lands Commission, and the Office of the Administrator of the Stool Lands,’ said Dr. Akwensivie.

This committee revised the rent from 50Gp to GHc36.50 per acre. This GHc36.50 per acre translate to about GHc9,016 per square kilometer. The mining companies felt this was on the higher side and they petition the sector minister to reject this new rate and asked for a review.

‘In fact one of their concerns was the fact that we failed to involve them before coming up with the rate. So we invited them together with the small scale miners, large scale miners to another meeting, which eventually looked at the rate again,’ he added.

After the meeting, the committee made proposals to the Minister of Finance, proposing at least half or two-third of GHc36.50 per acre. ‘We hoping that this new rate will reflect in the Fees and Charges Amendment Legislation that is currently before Parliament,’ he said.

‘We are hoping that subsequently, the mining companies will pay the new agreed fee. However, the proposals indicate that the proposed rate will take retrospective effect,’ Dr. Akwensivie explained.

This means that the mining companies will pay for the whole 2012, 2013, and as well as pay for 2014.

The committee also proposed that this rate should be subject to review every three years.

Daily Express was told that the mining companies were happy and hoping to honour their obligation.

Dr. Akwensivie said the reason why they have to review the rate is the fact that, small scale miners for a long time have been out of the rent net.

He said, ‘small scale miners don’t pay corporate tax, they don’t pay ground rent, they don’t pay mineral royalties and a lot of the statutory fees within the mining sector.’

‘So at that meeting, they were particularly interested in getting their members on board, and only way to get the members on board was to get the rate within their capabilities. We took that into consideration, and we hope that once we get them on board and have a very good data base of small scale miners, and we know where they are and where their offices are, subsequently we can decide to adjust the rate with their consent, because this is principle about tax,’ he noted.

‘What is the point in charging very exorbitant tax where people cannot pay? It will be in the best interest of this country to have a rate that people can pay. More people paying taxes, that results in better mobilization of good revenue,’ he emphasized.