High taxes on small scale mining could cause smuggling – Group

Business News of Wednesday, 21 November 2018

Source: citinewsroom.com


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The Association of Small Scale Miners is warning that government risks losing millions of cedis if taxes placed on activities of small-scale miners are high. The association argues that high taxes could lead to smuggling.

The government as part of measures to track tax revenue on gold exports, has moved the collection point for withholding tax for small scale mining operators to the point of export.

In an interview with Citi Business News, General Secretary of the Association of Small Scale Miners, Godwin Armah lauded the move but said the government must avoid making the percentage on the tax collection too high.

“It’s a move in the right direction, because if you look at the sector because it’s very informal, book keeping and all that is very poor so the best thing we could do is to get it at the export so that at the time you are exporting the gold then the tax can be levied there but one caution is that we should tax it from a low percentage so that government can get the taxes from the export”, he said.

He added, “If it’s on a higher percentage then what will happen is that most of the gold will be smuggled out, that is the reality, anytime there is high taxes then you realize that smuggling of mineral resources increases so we are going to sit with the exporters and then we will meet with the Ministry and see how best we will be able to come out with a formula that will really help us mobilize funds for the taxes”.


Government has said to simplify the collection of withholding tax for both small scale mining operators and tax authorities, the point of collection of the tax will be shifted to the point of export.

Mr Ken Ofori-Atta, the Minister of Finance, said in the Bill to make this happen, the exact details of the new arrangement and the benefits to both small scale mining operators and other industry operators would be clearly captured.

Mr Ofori-Atta said this when he presented the 2019 Budget Statement and Economic Policy of government on the theme: “A Stronger Economy for Jobs and Prosperity.”

He said a key challenge in optimizing mining revenues for the State was the verification, assessment and collection of what was due the State and in spite of work done to address these challenges, some loopholes, escape hatches, implementation weaknesses, and administrative lapses still existed.

He said government would intensify measures to address these challenges in the short to medium term, indicating that additional measures would be aggressively deployed to enforce existing legislation and regulations.

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