Ghana’s attempt to raise revenue from its artisanal gold mining sector by imposing a 3% withholding tax in 2019 backfired dramatically, driving a surge in smuggling and contributing to an estimated $11.4 billion in lost gold exports over five years, according to a new report by nonprofit group SWISSAID.
The report, released on June 11, details how the policy, intended to formalise and tax small-scale gold production, instead incentivised miners and aggregators to bypass official channels entirely. Declared artisanal gold exports collapsed almost immediately after the tax was introduced, while unrecorded flows through neighbouring countries into Dubai surged.
From 2019 to 2023, Ghana officially exported just 67.3 tonnes of gold to the United Arab Emirates. But the UAE reported receiving 296.7 tonnes from Ghana in the same period, revealing a 229-tonne discrepancy valued at over $11.4 billion based on prevailing gold prices. Much of this shortfall, the report argues, was linked to tax-driven smuggling.
“This massive mismatch illustrates the unintended consequences of poorly designed tax policy in the artisanal mining sector,” the report states.
Ghana’s artisanal and small-scale mining (ASM) sector contributes more than 40% of the country’s gold output, yet remains loosely regulated and difficult to track. In the absence of production monitoring at mine sites, the country relies on data from licensed gold buyers and exporters. When the withholding tax was introduced, many actors chose to operate outside the formal system entirely.
In response to industry pushback and rising illicit trade, the government reduced the tax to 1.5% in 2022. The move led to a moderate recovery in declared exports but failed to reverse the long-term shift to informal trade networks. By 2023, an estimated 34 tonnes of gold produced by ASM operations remained unrecorded, almost equal to the officially declared output from the same sector that year.
The withholding tax was fully repealed in March 2025. In announcing the decision, the finance minister credited recent policy adjustments with helping to boost formal ASM gold exports, though the SWISSAID report suggests structural damage has already been done.
The collapse in formal reporting during the tax years not only cost the state substantial export revenue, but also weakened traceability in Ghana’s gold supply chain, raising concerns over money laundering, tax evasion, and environmental harm tied to illegal mining.
The report notes that the original policy failed because it did not account for the fragile economics of ASM or the ease with which gold could be smuggled across Ghana’s porous borders. With little incentive to comply and no on-site production audits, miners and aggregators found it more profitable to avoid the tax altogether.
Although the 2025 repeal of the tax was widely welcomed, experts warn that Ghana’s broader approach to regulating and taxing artisanal mining remains incoherent. Without systems to monitor production volumes, verify sourcing, and ensure compliance, any fiscal intervention risks pushing trade further underground.
Efforts to formalise the sector, such as the establishment of the Ghana Gold Board (GoldBod) as the sole buyer and exporter of ASM gold, are still in early stages. The success of these reforms will be critical not only to boosting revenue, but to restoring trust and participation in the formal gold trade.
