GGDMA lauds major tax incentives, other relief for mining sector

– commits to working with Govt to continue vitality of industry

With Government announcing some $2 billion in relief for the mining community, the Guyana Gold and Diamond Miners Association (GGDMA) commended the move and lauded the People’s Progressive Party/Civic (PPP/C) Administration for keeping its campaign promises.
During a consultation with GGDMA miners and other stakeholders in the mining sector on Tuesday, Vice President Bharrat Jagdeo outlined a slew of incentives that he said would benefit operators.

A section of the miners at Tuesday’s engagement

According to a statement, the GGDMA hailed the engagement as a “major success”. In particular, the Association welcomed the reduction of the Final Tax on income from gold produced, declared, and sold. Currently, the tax is 3.5 per cent, but it will now be reduced to 2.5 per cent.
The GGDMA said another major development was the abolition of the burdensome 10 per cent Tributors Tax, which miners were subjected to for many years.
“The abolishment of this tax will benefit the personnel working within the various mining operations throughout the country as larger disposable incomes will allow them to better support their families during this time of rising prices. Managers and owners of mining operations welcome this move as it will create a more level playing field for recruitment and retention of quality personnel,” the Association stated.
In totality, the GGDMA said these measures would result in approximately $1.9 billion returning to the industry and this revenue would be utilised to reduce the burden of added operational costs and also to improve varying aspects of miners’ operations.
Moreover, it pointed out that the removal of the 14 per cent Value-Added Tax (VAT) on lubricating oils will have an immediate positive impact not just on the mining sector but all other sectors, such as construction and agriculture, where heavy equipment was essential.
Additionally, the Association said it was also pleased with the Government’s announcement of the $2.4 billion to be spent upgrading roads in mining areas.
“The Government has also committed to revisiting locations where the roads would be constructed so that the road development is aligned with the needs of the mining industry. New roads and upgraded roads will provide key linkages to mining areas allowing for ease of access and reduction in transportation costs,” the organisation outlined.
Meanwhile, during Tuesday’s engagement with VP Jagdeo, the GGDMA said it also raised several issues, including the need for reform at the Guyana Geology and Mines Commission (GGMC) and closer collaboration between the Association and the Natural Resources Ministry.
“The Vice President gave the assurance that those would be addressed. Government also expressed a willingness to encourage better relations between miners and the local banking sector to potentially overcome hurdles faced regarding access to financing,” the missive detailed.
According to the GGDMA, it values the partnership with the Guyana Government as they both seek to ensure the continued viability of the mining sector at the small, medium and large scale.
In fact, during Tuesday’s consultation, the Vice President reiterated the Government’s commitment to protecting small miners from being bullied by larger concession holders. As a result, he promised to take the matters affecting the sector before Cabinet, once those matters were captured in report form in an effort to have them resolved. “Because they’ve been festering for a long time, and they must focus on what I said before: efficient discharge of duty in a fair, impartial manner; and safeguards against capricious acts and corruption. So those would be the terms of reference,” he said.
According to Jagdeo, he wants the report to detail what the Government can do institutionally, as well as monitor the staff members who are deployed into the fields.
Jagdeo also noted the importance of protecting miners.
“We have to find a fair way safeguarding people who have mining permits, at the same time ensuring that there is more land and opportunities for small miners, and small miners must also feel like they are an important part of the sector, and treated fairly.
“So, some mechanism for doing this (must be found), and I expect that the GGDMA and the large miners would work with us in ensuring that that happens. You have to have a live-and-let-live philosophy in this industry,” he explained.
Jagdeo also noted that there were times in the industry when very large mining companies try to force small miners off their concessions.
The Vice President made an appeal that they could all co-exist, while noting that a mechanism must be found for this to happen: more land to be allocated and small miners to be better protected.
“Other things have to be done. The roads we will continue. There is a programme about roads. We’ll have to meet again and talk about how we do roads in the future. And so that will be ongoing. And I hope the current projects, which exceed $2 billion, will be implemented quickly,” he said.