Lithium deal: Govt’s boastful claim on 10% Royalty, a celebration of mediocrity – NDC
The recently announced lithium deal has ignited a heated debate, with the National Democratic Congress (NDC) labelling the government’s proclamation of securing a 10% royalty a “celebration of mediocrity.”
The NDC contends that while the government asserts Barari DV will be subjected to a 35% corporate tax rate, there exists a pressing need for clarity on the company’s status and a thorough disclosure of concessions granted.
The Mining Lease, according to the NDC, merely stipulates that Barari DV should pay taxes in adherence to Ghana’s mining laws, leaving room for ambiguity and speculation.
In a statement, the Communications Officer of the NDC, Sammy Gyamfi noted that “On the claim by the government, that Barari DV will be paying corporate tax of 35% under the deal, it is important for government to clarify the status of the company and provide the full facts relative to concessions that have been granted the company.
“What the Mining Lease expressly provides is that, Barari DV shall pay taxes in accordance with the mining laws of Ghana, without more. We are however told that the Company is registered under the Ghana Free Zones Authority and is entitled to a 10-year tax holiday, when such tax concessions are ordinarily not granted to mining companies in the country. This if true, will deprive the country of corporate taxes during the first ten years of the Ewoyaa Lithium project. This will effectively limit Ghana’s share to the paltry 10% royalty and marginal benefits from our 13% carried interest and the 6% equity held by the Minerals Income Investment Fund (MIIF).
“It is therefore imperative, for government to clarify the status and tax obligation of Barari DV and its parent company. Ghanaians deserve to know whether or not the company is a free zone company and why a mining company should be accorded free zone status. Ghanaians deserve to know all the concessions government is giving the company (Barari DV/Atlantic Lithium) for a holistic assessment of the benefits of the deal.
“Beyond that, strict provisions on tax compliance and enforcement are required to ensure that the state is not cheated through transfer pricing and creative accounting. It is important to make the point, that government’s boastful claim about securing a 10% Royalty under the deal, is a celebration of mediocrity.”
The NDC is also pressing for complete transparency in the Barari Lithium deal, specifically calling for the revelation of the identities of the beneficial owners holding a 4.4% equity stake in the venture.
Under the current shareholding structure of the company, there exists a 4.4% equity share designated under the label of “Previous Land Owners.”
In a bid to uphold transparency and accountability, the NDC is fervently demanding a comprehensive disclosure of the identities of the beneficial owners associated with this 4.4% equity and a clear explanation of the process leading to this allocation.
citinewsoom.com
Leave A Comment