The New Patriotic Party (NPP) flagbearer, Dr. Mahamudu Bawumia, has pledged to slash the mining export tax to 1% if he secures victory in the 2024 general elections.
Speaking at a campaign rally on August 8, 2024, Dr. Bawumia presented this proposal as a key tactic to address the pervasive issue of gold smuggling, which he identified as a critical problem in Ghana’s mining sector.
He argued that reducing the export tax would make gold smuggling less attractive financially, thereby promoting legal and transparent trade. This move is anticipated to increase domestic gold production, enabling more refining to be done within the country.
Dr. Bawumia also linked this tax cut to his broader economic vision, which includes the “gold for oil” and “gold for reserves” initiatives. These programs aim to leverage gold exports to stabilize the national currency and strengthen Ghana’s foreign reserves, which he considers essential for the country’s economic stability and resilience.
He highlighted the success of a previous reduction in the gold export levy from 3% to 1.5% in 2021, noting that it had led to a significant decline in gold smuggling. Dr. Bawumia credited this outcome to the creation of a more favorable tax environment that encouraged miners to adhere to legal export practices, resulting in a more regulated 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.”