Keypoints:
- VAT on exploration scrapped
- Industry says move boosts competitiveness
- Small-scale output hits record highs
GHANA will abolish value-added tax on mineral exploration and reconnaissance in a bid to stimulate fresh investment and revive long-stalled development across its mining sector. The announcement, delivered by Finance Minister Cassiel Ato Forson during the presentation of the 2026 budget on Thursday, marks one of the most significant shifts in mining policy in more than two decades.
A levy that held back new projects
The 15 percent VAT, introduced 25 years ago as part of broader fiscal reforms, has long been criticised for inflating early-stage project costs. The charge applied to exploration expenses including drilling, sampling and assay work, raising upfront spending for companies already exposed to high geological risk.
Industry associations such as the Ghana Chamber of Mines have repeatedly warned that the levy weakened Ghana’s competitiveness when compared with regional peers. Countries including Cote d’Ivoire, Burkina Faso and Kenya do not impose VAT on exploration, a factor that analysts say has increasingly tilted new investment away from Ghana.
Ato Forson said the abolition of the tax would ‘revive investor confidence, stimulate greenfield activity, and ensure the long-term sustainability of the country’s mining sector’. He added that the move formed part of a broader review of VAT and would support responsible mining practices while helping to curb unregulated prospecting, which in recent years has damaged water bodies and degraded forest areas.
Sector overhaul amid rising small-scale output
The announcement comes as Ghana posts record small-scale gold exports, underscoring the complex shifts under way in the country’s mineral economy. Between January and October, small-scale exports surged to 81.7 metric tons valued at roughly $8.1bn, overtaking the 74.1 tons shipped by large-scale operators over the same period, worth about $6.6bn, according to finance ministry data.
The government had targeted total output of around 144.5 tons in 2025. Ato Forson said the surge reflects recent regulatory reforms that have formalised artisanal operations and tightened supervision of export channels, reducing leakages and improving revenue collection.
Industry welcomes renewed competitiveness
Mining executives have broadly endorsed the policy shift. Ghana Chamber of Mines president Michael Akafia said VAT on exploration had ‘negatively affected our competitiveness as a mining jurisdiction and was a clog on the pipeline of projects’. Removing it, he said, should make Ghana more appealing to investors weighing greenfield developments across West Africa.
Ghana’s mining sector, which contributes more than a third of export earnings, is anchored by gold, with bauxite and manganese also playing key roles. The government has launched an audit across the industry this month as part of efforts to improve state revenue and strengthen the regulatory framework.
Major operators in the country include Newmont, AngloGold Ashanti, Gold Fields, Perseus, China’s Zijin and Cardinal Namdini. Analysts say the tax change could encourage these companies—and potential new entrants—to escalate exploration budgets after years of cautious spending.
Part of a wider reform push
Officials argue that eliminating VAT will help draw in capital needed to discover new deposits, extend mine life cycles and sustain long-term production. For a country heavily dependent on mineral exports, expanding the project pipeline is seen as critical to stabilising earnings in the face of fluctuating global prices.
With exploration now more cost-competitive in Ghana than at any point in the past twenty-five years, policymakers hope the reform will translate into renewed drilling campaigns across underexplored regions.
