In the event that he wins the impending general elections in 2024, Dr. Mahamudu Bawumia, the flagbearer of the ruling New Patriotic Party (NPP), has pledged to lower the mining export tax to 1%.
During a campaign event on August 8, 2024, Dr. Bawumia described this effort as a calculated step to counter gold smuggling, citing it as a major problem that affects the nation’s mining industry.
The goal of the export tax cut, according to Dr. Bawumia, is to make it less profitable for people to smuggle gold out of Ghana.
He thinks the proposal, which would reduce the tax from its present percent, will encourage lawful and transparent transactions and enhance the amount of gold produced that can be refined domestically.
Additionally, the NPP flagbearer emphasized how his proposed “gold for oil” and “gold for reserves” initiatives would be supported by this tax cut.
With the help of gold exports, these programs hope to increase the nation’s foreign reserves and stabilise the value of the currency.
These initiatives, in Dr. Bawumia’s opinion, are essential to establishing economic stability and strengthening Ghana’s financial stability.
Dr. Bawumia pointed out that there had already been a notable decline in gold smuggling as a result of the gold export fee being lowered from 3% to 1.5% in 2021.
He ascribed this accomplishment to the more advantageous tax climate, which prompted miners to follow lawful export procedures and helped create a more regulated and open gold market.
“A few years ago, I pushed for the reduction of the gold export levy (withholding tax) from 3% to 1.5%. The result of this is that after a sharp decline in 2021, the gold export volumes have been steadily recovering, with 2024 showing promising signs. In the first half of 2024, the small-scale mining sector alone produced a total export volume of 821.97 troy ounces.”
“This is more than double that of Jan-Jun 2023 (404.06 troy ounces) and 2022 (262.05 troy ounces). Also, in value terms, 2024 recorded $1.77 billion higher than 2023 and 2022 just from the small-scale sector.”
“Given our strategic intention to realize higher production volumes to refine locally and support the gold for oil and gold for reserves programmes for a stable currency, I will further reduce the withholding tax from 1.5% to 1%, in the next government under my presidency.”