Ghana: $6bn Lost in Gold Export Between 2013 and 2016 – Report

Google+ Pinterest LinkedIn Tumblr +

Ghana, one of the continent’s major exporter of gold, lost $6 billion worth of gold sent to Dubai, India, and Switzerland between 2013 and 2016 due to the illegal sale of the precious metal, a survey by the Africa Center for Energy Policy (ACEP), an Accra-based policy think tank has revealed.

The report said the data which was not recorded in official statistics resulted from illegal trade in the small-scale mining sector, and the inability of Ghana Revenue Authority (GRA) to ensure proper taxation scheme in the sector.

It pointed out that 95 percent of the small scale-miners, interacted with never received tax certificate for the 3 percent withholdings payments to the gold buyers.

The GRA in a bid to curb the losses in 2016, signed a Memorandum of Understanding (MoU) with the Ghana National Association of Small Scale miners, for the introduction of a 10 percent withholding tax for the small-scale sector which amounted to a GHC500 quarterly postage stamp system.

However, this was later reduced to three percent, after many complaints by the miners who said the 10 percent was too high.

Despite the generosity shown by the GRA, it has not been enough to ensure compliance as gold buyers refuse to issue tax certificates after transactions.

“Others did not even appreciate the significance of the tax certificate as a proof of payment to GRA,” the report said.

“Once it is a withholding tax, you have to issue a tax certificate from GRA to show that you have actually paid the tax to the government. But that is not done, and there is no proper monitoring of the sector when it comes to the payment of taxes,” said Executive Director of ACEP, Benjamin Boakye.

On why the situation has persisted, the survey observed that there was little incentive for small-scale miners to have taxes withheld because gold buyers present higher prices in exchange for tax certificates.

“This motivates the miners to take a higher rate rather than demanding tax certificates to fulfill their obligations,” Mr. Boakye added.

Other findings of the survey also revealed that some gold buyers and exporters have created a syndicate with importers and foreign traders of general goods. This allows merchandise dealers to use their revenue from the sale of goods (Cedis) to finance licensed gold purchases for export in exchange for Dollars abroad to ship goods to Ghana.

Through this practice, they can avoid compliance with regulations to repatriate cash proceeds from their trade.

According to ACEP, the practice persists because there is weak coordination and interface among the Minerals Commission, the Precious Minerals Marketing Company and the Bank of Ghana to track the quantity of gold produced, purchased, and how capital revolves within the gold export business.

On the way forward, the think tank advocated a flat tax regime for the small-scale mining sector, as a way of increasing revenue generation from that sector which contributes 34 percent of total gold output in the country.

Share.

About Author

1 Comment

  1. Pingback: Ghana: $6bn Lost in Gold Export Between 2013 and 2016 – Report - Diamonds Jewelry

Leave A Reply