Business

Ghana loses $6billion through gold export

A survey conducted by the Africa Center for Energy Policy (ACEP), has shown that 6 billion dollars worth of gold sold to Dubai, India and Switzerland between 2013 and 2016 was not recorded in the national data.

The loses, according to ACEP was largely due to illegal trade in the small scale mining sector, and the Ghana Revenue Authority’s(GRA) inability to ensure proper taxation scheme in that sector.

In 2016, the GRA signed a Memorandum of Understanding (MoU) with the Ghana National Association of Small Scale miners, for the introduction of a 10 percent withholding tax for small scale sector which amounted to a GHC500 quarterly postage stamp system.

But this was later reduced to three percent, after several agitations by the miners who complained that the 10 percent was too high.

However, this has not been enough to ensure compliance as gold buyers refuse to issue tax certificates after transactions.

The survey pointed out that, 95% of the small scale-miners ACEP interacted with never received tax certificate for the 3% withholdings payments to the gold buyers.

“Others did not even appreciate the significance of the tax certificate as a proof of payment to GRA,” it added.

Executive Director for ACEP, Benjamin Boakye said the inefficiencies of the GRA is making the country lose billions of cedis.

“Once it is a withholding tax, you have to issue a tax certificate from GRA to show that you have actually paid the tax to government. But that is not done, and there is no proper monitoring of the sector when it comes to the payment of taxes,” Mr. Boakye said.

The survey also revealed that there is little incentive for small scale miners to have taxes withheld because gold buyers present higher prices in exchange of tax certificates.

“This motivates the miners to take a higher rate rather than demanding tax certificates to fulfil their obligations,” Mr. Boakye added.

The survey also revealed that some gold buyers and exporters have created a link to importers and foreign traders of general goods. In this relationship, merchandise dealers use their revenue from the sale of goods (Cedis) to finance licensed gold purchases for export in exchange for Dollars abroad to ship goods to Ghana.

Through this practice, they avoid compliance with regulations to repatriate cash proceeds from their trade.

According to ACEP, the practice persists because there is weak coordination and interface among the Minerals Commission, the Precious Minerals Marketing Company and the Bank of Ghana to track the quantity of gold produced, purchased, and how capital revolves within the gold export business.

The Africa Center for Energy Policy is therefore proposing a flat tax scheme for the small scale mining sector, as a way of increasing revenue generation from that sector which contributes 34 percent of total gold output in the country.

citibusinessnews.com

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