Ghana is taking a major step to revitalise its mining sector by abolishing the value added tax on mineral exploration and reconnaissance activities, a move expected to boost investor confidence and unlock long delayed development. The announcement, delivered by Finance Minister Cassiel Ato Forson during the twenty twenty six budget presentation, marks a significant policy shift aimed at repositioning Africa’s leading gold producer for stronger growth.
The 15 percent VAT, imposed twenty five years ago during broader fiscal reforms, has long been a point of contention. It inflated early-stage exploration costs, including drilling and assay work, and discouraged companies from pursuing high risk greenfield projects. Industry bodies such as the Ghana Chamber of Mines have repeatedly warned that the tax damaged Ghana’s competitiveness when compared to regional peers like Ivory Coast, Burkina Faso and Kenya, all of which exempt exploration from VAT.
Forson told parliament that eliminating the levy would help restore investor interest, stimulate new exploration and secure long term sustainability for Ghana’s mining industry. He added that the adjustment, part of a wider VAT overhaul, would also promote responsible mining practices and help curb illegal prospecting, which has caused severe environmental degradation in forests and waterways.
The announcement comes at a time when Ghana’s small scale mining sector is posting record performance. From January to October, artisanal gold exports reached eighty one point seven metric tons valued at about eight point one billion dollars, surpassing large scale mining exports for the first time. Large scale producers shipped seventy four point one tons worth six point six billion dollars, according to finance ministry data. Ghana had targeted a total output of one hundred forty four point five tons for twenty twenty five.
Officials say the surge reflects recent reforms that have formalised artisanal mining operations and strengthened export controls, transforming what was once an informal and poorly regulated space into a major contributor to national output.
The Ghana Chamber of Mines praised the VAT removal, with its president, Michael Akafia, stating that the tax had hampered the country’s attractiveness and restricted the development pipeline of new mining projects. Industry players now expect Ghana’s more investor friendly environment to accelerate exploration, unlock new deposits and reinforce the country’s position as a top global gold producer.
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