Small-scale miners (SSM) will no more be required to pay three per cent withholding tax on gold at the point of export through the Precious Minerals Marketing Company (PMMC) from January 1st 2022.
The Minister of Lands and Natural Resources, Mr Samuel Abu Jinapor, who made this known, stated, “ “For the avoidance of doubt, there will be no tax collected at the point of export through the PMMC from small-scale miners,” he stressed.
Mr Jinapor, who said this in a virtual address at the 7th Ghana Mining Industry Awards (GMIA) held in Accra last Friday, said the decision was arrived at after thorough stakeholders engagement on the merit of the three per cent withholding tax policy.
The Ghana Revenue Authority (GRA) implemented the three per cent withholding tax policy on the export of gold from the country in 2019.
However, the Ghana National Association of Small-Scale Miners (GNASSM) and some think tanks, especially the African Centre for Energy Policy (ACEP), called for the three per cent to be scrapped because it had led to the smuggling of gold out of the country.
Following the concerns, the Ministry of Lands and Natural Resources began engagements with the Ministry of Finance on a possible scrap of the tax.
New Budget
When the Minister of Finance, Mr Ken Ofori-Atta, presented the 2022 Budget Statement and Economic Policy of the government to Parliament last Wednesday, he announced a review of the withholding tax policy on gold export.
In the budget statement, Mr Ofori-Atta mentioned a reduction by half, the withholding tax on the sale of unprocessed gold from three per cent to 1.5 per cent.
That was part of the fiscal policy measures the minister proposed for the consideration and approval of Parliament to underpin the 2022 budget and to support the fiscal consolidation and growth agenda of the government.
Describing the theme of the 7th GMIA : “Positioning Ghana as a mine support service hub in West Africa” as apt, Mr Jinapor reiterated the government’s commitment to remove bottlenecks in the gold value chain to create an enabling environment for responsible mining in the country.
He said the theme for the event was in line with the government’s broad vision to make Ghana the mining hub of Africa “where all mine and mine-related activities, from exploration to refining, from research to innovation, will thrive.”
He said the government’s focus was to build a competitive mining value chain in the country and make the industry beneficial to the local economy by promoting local content participation.
The minister observed that the best way forward to achieving that objective was for strong collaboration among the stakeholders in the mining industry.