Dr. Mahamudu Bawumia, the flagbearer of the governing New Patriotic Party (NPP), has promised to reduce the mining export tax to 1% if elected in the upcoming 2024 general elections.
Speaking at a campaign event on August 8, 2024, Dr. Bawumia outlined this initiative as a strategic move to combat gold smuggling, which he identified as a significant issue affecting the country’s mining sector.
Dr. Bawumia explained that the reduction in the export tax is intended to make it less financially appealing for individuals to smuggle gold out of Ghana.
By lowering the tax from the current rate, he believes that the policy will incentivize legal and transparent transactions, leading to increased gold production volumes that can be refined domestically.
The NPP flagbearer also highlighted how this tax reduction would support his proposed “gold for oil” and “gold for reserves” programs.
These initiatives aim to use gold exports to stabilize the national currency and strengthen the country’s foreign reserves.
According to Dr. Bawumia, these programs are crucial for achieving economic stability and enhancing Ghana’s financial resilience.
Dr. Bawumia noted that a previous reduction in the gold export levy from 3% to 1.5% in 2021 had already led to a significant decrease in gold smuggling.
He attributed this success to the more favorable tax environment, which encouraged miners to adhere to legal export practices and contributed to a more controlled and transparent 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.”
