Apply Flat Rate Tax to Small Scale Miners…ACEP Urges GRA

A policy think tank, Africa Centre for Energy Policy (ACEP), has called on the Ghana Revenue Authority to apply a flat rate tax to small scale miners.

This according ACEP will help address tax evasion in Ghana’s Small-scale mining sector.

The approach it said will also enable GRA get accurate data report on production which has the potential to ensure effective taxation at the export level.

Benjamin Boakye, Executive Director of ACEP who was speaking at a workshop in Accra yesterday said applying a flat rate tax to small scale miners will ensure that taxes are linked to participation in the sector rather than output.

The small-scale mining sector now contributes about 34% of total gold output in the country.

According to ACEP, about $6 billion dollars of gold exports from Ghana to India, Dubai and Switzerland between 2013 and 2016 were not accounted for in the national data.

Tax Evasion

ACEP’s engagement with players in the industry reveals that there is a flourishing illegal trade of gold outside the regulatory regime.

Mr. Boakye disclosed that 19 percent of the small-scale miners they interacted with never received tax certificate for the withholdings payments to the gold buyers.

The others, according to him, did not appreciate the significance of the tax certificate as a proof of payment to GRA.

“Some of the buyers also present two prices for the gold to the miners to aid avoidance of the tax. There is a price for not withholding and a price for withholding the tax. If a miner wants the tax withheld in that instance, he receives a lower price for the gold and if the miner doesn’t want the tax to be withheld, the miner gets a higher price for the gold,” he stressed.

According to him, the problem of tax evasion in the sector would be solved when collaboration between GRA, Bank of Ghana, and the Minerals Commission is strengthened.

He further called on the authority to institute a “whistle blower” incentives to encourage citizen’s participation in the fight against gold smuggling.

By: Emmanuel Yeboah Britwum