Government must not rush to impose windfall tax on mining companies in view of the soaring of gold prices on the world market, the General Secretary of the Ghana Mine Workers’ Union (GMWU) under the Trades Union Congress Ghana, Abdul-Moomin Gbana has cautioned.
According to the GMWU, the imposition of windfall tax on mining companies would not augur well for the mining industry in view of the negative impact Covid-19 had brought on businesses.
Gold hit the all-time record price of US$ 2,051.02 per ounce in August 5, 2020, ostensibly due to the new wave of infections that were being recorded in countries such as Germany, South Korea, Australia, Japan that appear to have contained the pandemic much better.
In view of this, some stakeholders have called on the government to impose windfall tax on mining companies to raise additional revenues to fund its programmes.
Mr Gbana who made the call at the Union’s National Executive Council meeting held at Sunyani at the weekend, suggested that government should develop a roadmap for the mining companies to invest the windfall profit in improving mining infrastructure and exploration.
“We expect government to leverage this huge windfall that would ultimately accrue by demanding from mining companies as they get into the next budget cycles to present ambitious recapitalization plans particularly targeted at modernizing mining infrastructure and systems; expanding exploration activities and ultimately increasing production and backed by a monitoring mechanism to ensure these plans are fully and strictly complied with,” he said.
That, he said, “is a more progressive alternative to windfall tax and would place the mining industry on a sound footing to create additional jobs and ultimately respond to the increased unemployment numbers brought about by Covid-19 in the short and long run; grow the industry’s contribution to the national kitty through taxation (direct and indirect) and also contribute to improving the infrastructural development needs of host communities.”
Mr Gbana entreated the mining companies to use the windfall profit judiciously to boost production and growth of the mining industry.
“We want to caution captains of the industry to hasten slowly in making expenditure decisions on the windfall that is likely to accrue to them. Any attempt to rush into wanton dissipation of the funds by paying unreasonable dividends to shareholders and prioritizing the payment of executive compensation, or by engaging in questionable procurement, or suspicious project acquisition will not augur well for the future of the industry,” he said.
The General Secretary of the GMWU commended the government for initiating the Community Mining Programme targeted at the small-scale mining sector, saying the programme would help to create jobs and bolster the domestic economies of these mining communities and Ghana as a whole.
The National Chairman of Ghana Mine Workers Union, GMMU, Mensah Kwarko Gyakari in his address expressed concern about some mining companies laying of their workers.
“It is worrying that at a time gold price is rising, unfortunately some of the companies are thinking of doing away with permanent workers, and tend to give fixed term contract. Is it even fair that gold price is going up and production is also up, and companies want to resort to redundancies?” he queried.
Mr Gyakari said the GMMU leadership would engage managements of the companies on the issue and urged government to wade into the matter, stressing “How can mines with more than 20 year life span be allowed to be employing workers on fixed term contract.”