c) The following data relates to Nyametsew Mining Company for 2018 year of assessment.
Production – 2,000,000 Ounces
Revenue – GH¢10,000,000
Cost of Production – GH¢4,000,000
Required:
Compute the Royalty Payable. (2 marks)
View Solution
Rate of tax is 5%
Revenue =10,000,000
Royalty =5% of 10,000,000 =GH¢500,000.00
Royalty Payable = GH¢500,000
d) Mining companies are given some benefits in their operations in many countries to help them create benefits for their host governments and shareholders. One of the benefits of the mineral operation is the stability agreement that mining companies sign with host governments the world over.
Required:
What does stability agreement seek to achieve for mining companies in Ghana? (6 marks)
View Solution
Mining companies want to be able to plan over a long period of time but this can be affected by changes in fiscal system they operate under.
To protect mining companies from fiscal changes, the mining companies enter into stability agreement so ensure that any adverse fiscal system (such as changes in levies, royalties among others) does not affect the mining companies. The stability agreement allows such companies to benefit from any favourable fiscal system.