You are here: HomeBusiness2018 06 28Article 664133

Business News of Thursday, 28 June 2018

Source: thebftonline.com

Taxes lost on US$6bn of smuggled gold

Officials of ACEP, GRA, Minerals Commission and other stakeholders at the report launch Officials of ACEP, GRA, Minerals Commission and other stakeholders at the report launch

Statutory taxes on about US$6billion worth of gold exported from Ghana between 2013-2016 went unreported as a result of smuggling, the Africa Centre for Energy Policy (ACEP) has revealed in its 2017 Tax Administration and Tax Evasion report.

According to the energy policy think-tank, the loss in revenue was caused by loopholes in the system which enabled gold smuggling through the small-scale mining sector.

Some of these loopholes, according to the report, include weak export control at the borders of neighbouring countries, lack of motivation for citizens to report activities of smugglers, and poor enforcement of penalties for offenders.

ACEP’s Executive Director, Benjamin Boakye, told the B&FT that the taxes lost could be a minimum of US$180million in withholding taxes, “assuming it all came from the small-scale sector, adding that “it could be more for the large-scale sector.”

Also, about 95 percent of small-scale miners said they had never received tax certification for withholding payments made to gold buyers, which is believed to be one of the factors influencing tax evasion coupled with money laundering activities.

Speaking at a stakeholder forum on addressing gaps and ensuring efficiency in tax revenue mobilisation in Accra, Executive Director of ACEP, Benjamin Boakye said: “About US$6billion of gold exported from Ghana to India, Dubai and Switzerland between 2013- 2016 has not been reported, and this was revealed by these countries because they have systems in place to track all these transactions which Ghana does not have”.

He added that going forward, strict measures should be put in place to check gold smuggling if government is to meet its GH¢5.2 million revenue targets for the small-scale mining sector.

He further made recommendations that will aid in addressing the issue of tax evasion in the small-scale mining sector, including the need for a flat-rate tax to be applied on all small-scale miners, and strengthening collaboration between the Ghana Revenue Authority, Bank of Ghana and Minerals Commission.

He also suggested the institution of whistle-blower incentives that encourage citizens to participate in the fight against gold smuggling, as well as the GRA auditing activities of major foreign traders in order to trace foreign exchange activities.

Benjamin Boakye revealed that the small-scale mining sector contributes about 34% of the total gold output in Ghana, which means it could contribute a significant amount to taxes from the mining sector.