Presidential candidate of the governing New Patriotic Party (NPP), Dr. Mahamudu Bawumia, has pledged to reduce the mining export tax to 1% if elected in the 2024 general elections.
This initiative aims to discourage gold smuggling by making legal transactions more financially attractive.
At a campaign event on August 8, 2024, Dr. Bawumia explained that lowering the mining export tax from its current rate would promote legal and transparent transactions, boosting domestic gold production and refining.
He identified gold smuggling as a significant challenge in Ghana’s mining sector and presented the tax cut as a strategic solution.
The NPP flagbearer emphasized how this reduction aligns with his proposed ‘gold for oil’ and ‘gold for reserves’ programs, which are initiatives designed to stabilize the national currency and enhance Ghana’s foreign reserves by leveraging gold exports.
Dr. Bawumia underscored the importance of these programs for economic stability and financial resilience.
Reflecting on past successes, Dr. Bawumia noted that reducing the gold export levy from 3% to 1.5% in 2021 significantly curbed gold smuggling.
He attributed this to a more favourable tax environment, which encouraged legal export practices and fostered a more transparent gold market.
He said, “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,” he added.