Ghana will eliminate value-added tax on mineral exploration and reconnaissance to attract greater investment into its mining industry, Finance Minister Cassiel Ato Forson announced, as the continent’s leading gold producer seeks to revive development after more than twenty years of limited new projects.
The 15% VAT, introduced 25 years ago during broader fiscal reforms, applies to exploration activities such as drilling and assay testing, raising upfront expenses for companies operating in the high-risk early phases of mining.
Industry groups, including the Ghana Chamber of Mines, have long argued that the levy discouraged greenfield investment and weakened Ghana’s competitiveness compared with countries such as Ivory Coast, Burkina Faso and Kenya, which exempt exploration from VAT.
“Abolishing VAT will revive investor confidence, stimulate greenfield activity, and ensure the long-term sustainability of the country’s mining sector,” Forson told parliament during Thursday’s presentation of the 2026 budget.
He said the change, part of a wider VAT review, is also intended to support responsible mining practices and curb unregulated prospecting that has damaged forests and waterways.
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The announcement follows a surge in small-scale gold exports between January and October, which reached a record 81.7 metric tons valued at about $8.1 billion.
These exports surpassed large-scale shipments of 74.1 tons worth $6.6 billion for the first time, according to finance ministry data. Ghana had projected gold output of roughly 144.5 tons for 2025.
Forson said the jump reflects the impact of reforms that have formalised artisanal mining and tightened export oversight.
The Ghana Chamber of Mines welcomed the government’s decision. “VAT on exploration negatively affected our competitiveness as a mining jurisdiction and was a clog on the pipeline of projects,” its president, Michael Akafia, told Reuters mining contributes more than one-third of Ghana’s export revenues, with gold as the dominant mineral alongside bauxite and manganese.
As part of wider reforms to increase industry earnings, the government launched a new audit this month. Major companies operating in the country include Newmont, AngloGold Ashanti, Gold Fields, Perseus, Zijin, and Cardinal Namdini.
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Image Credit: Reuters
