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Newmont Ghana escapes BoG sanctions after failing to surrender export receipts


Newmont Ghana Gold Limited has escaped sanctions from the Bank of Ghana (BoG) over its failure to surrender 30 per cent of its export receipts to the Central Bank in 2016.This was due to miscommunication amount the Minerals Commission, the BoG and Newmont. As a result, the Parliamentary Select Committee of Finance has directed the BoG not to apply any sanctions to the company, but should, however, apply the sanctions should Newmont fail to surrender the receipts for this year as well.
This was contained in the committee’s report on the investigation to ascertain whether Newmont Ghana and Ghana Bauxite Company have had their mining agreements ratified by Parliament and whether the two companies were VAT compliant.
Out of the deliberations of the report of the Public Accounts Committee on foreign exchange receipts and payments for the year 2015, it came to light that Newmont Ghana had been exempted from surrendering its foreign exchange earnings to the BoG as part of its mining agreement with the country.
This position has, however, changed after 2015 when the company had a revised investment agreement with the government which required it surrendered 30 per cent of its export proceeds to the BoG.
However, due to the unawareness of the BoG about the change in agreement, it failed to capture the 30 per cent export receipts and Newmont also failed to surrender it.
The committee has, therefore, urged the BoG to take note of the change in agreement and capture the 30 per cent surrender requirement of Newmont and where it still fails to surrender, the necessary sanctions should be applied.
The Chairman of the Finance Committee, Dr Mark Assibey Yeboah, told the GRAPHIC BUSINEESS in an interview that since 2016 was past and there was miscommunication among the BoG, the Minerals Commission and Newmont, it would not be right to apply any sanctions to Newmont.
“When we say they have to surrender their foreign receipts to BoG, it is not as if its free money. They will just give the BoG 30 per cent of their forex income and they will receive the cedi equivalent so if they did not do that due to miscommunication, we cannot sanction them because it is not as if the government has lost any money as a result.
“At the time that they did not do it, it might have affected the strength of our currency but that is passed now,” he said.
He added that “so going forward, now that all the parties are aware about the change in agreement, the necessary sanctions will be applied should Newmont fail to surrender the receipts”.
Tax exemption
The committee also recommended to Parliament to grant Newmont tax exemptions till 2018.
It said the company had a correspondence with the Ministries Trade and Industry and Finance and per the correspondence, it was exempted from the payment of import VAT and National Health Insurance Levy (NHIL), as well as ECOWAS and EDAIF levies.
It indicated that Parliament had already approved exemption for Newmont from the payment of these taxes for 15 years and Newmont is, therefore, required to pay taxes after 2018 which is when the 15 years would end.
Ghana Bauxite Company
As regards the Ghana Bauxite company, it conceded that its agreement had not been ratified by Parliament.
It explained that the company had gone through a number of transitions as the current management took over in 1997 with the Ghana government having 20 per cent shares and China Bauxite Company owning 80 per cent shares.
The committee, therefore, implored the Minerals Commission to urge the government to bring the agreement to Parliament as soon as possible for ratification.
The committee observed that there was no line item for record of foreign exchange earned for bauxite mined in the country in the report of the Auditor General.
The company informed the committee that it had been receiving officials from the BoG who went through its records when it does its balance of payments survey.
The BoG, however, explained that it had identified a few inadequacies in the existing reporting format and was, therefore, expanding its reporting system which would capture all receipts through the commercial banks.
On the payment of VAT, the company informed the committee that it was not exempted from the payment of VAT and the company, therefore, filed its taxes as expected and the Ghana Revenue Authority corroborated this position.
— GB

Credit: Graphic Online

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