Africa-Press – Ghana. Vice President Mahamadu Bawumia has said that he will reduce the withholding tax on gold mining from 1.5 percent to 1 percent when voted into office next year.
Dr Bawumia is confident this will improve on tax collection and help shore up government revenue.
He was speaking at the opening of a new refinery ‘The Royal Ghana Gold Refinery’ which is projected to accrue over $10 billion before the end of this year.
Dr Bawumia recalled the challenges in revenue mobilization as a result of increase in withholding tax which is 1.5 percent.
He expressed concern that this has resulted in tax avoidance by some operators in the gold mining business.
The Vice President noted that the 1.5 percent withholding tax has led to smuggling of gold to neighbouring countries.
To address the challenge, he spoke about reducing the withholding tax to 1 percent when voted into power next year.
“Three years ago, government reduced the gold export levy withholding tax from 3 percent to 1.5 percent the result of this is a sharp decline in gold export in 2021.”
“The gold export volumes have been steadily recovering in 2024 showing promising signs, giving our succeeding intention to refine locally and support gold for oil and gold for reserves programme for a stable currency. I intend to reduce the withholding tax from 1.5 percent currently to 1 percent next year, God willing under my presidency”.
The Royal Ghana Gold Refinery is expected to provide eighty to one hundred jobs and more than 500 indirect jobs.
It will refine 400 kilograms of gold a day with a projected revenue of over $10 billion before the end of this year.
Governor of the Bank of Ghana, Dr Ernest Addison underscored the relevance of the refinery and said more revenue will be accrued.
He said, since the rolling out of the gold purchase arrangement in 2021 government has accrued over $5 billion.
“Under the Domestic Gold Purchase Programme, the Bank has been able to accumulate sizable foreign exchange of the most part exceeding expectation. Since the inception of the gold purchase programme the bank has bought 55 tonnes of gold estimated at a value of over five billion US dollars”.
“This year alone the bank has bought 23 tonnes of gold estimated at 1.6 billion US dollars”.
Finance Minister, Dr Amin Adam spoke about initiatives to explore other mining enclaves in the country.
“As it stands, Ghana gold belt remain largely unexplored representing enormous potential and substantial revenue generation that we are currently not capitalizing on,” he said.
The Minister of Lands and Natural Resources, Samuel Abu Jinapor, emphasized on discussions which are underway to secure the international gold mining certification.
“To establish a public private partnership between Rossy Royal Mineral Commission and the government of Ghana represented by the Bank of Ghana to build the state-of-the-art facility with a capacity and ability to refine gold at 24 carat marks a pivotal moment to secure the London bullion market certification to ensure we easily trade gold in the international market,” he said.
Chief of Kyebi, Amoatia Ofori Panyin, pleaded with government to consider building refineries in mining areas instead of Accra.
“I will like to see a day when a refinery is built in Obuasi and Tarkwa so that the people who live there can have the opportunity and decent work,” he suggested.
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