Tax expert at KPMG, Kofi Frempong-Kore, has raised concerns over Ghana’s new mining sector tax policies, arguing that recent government measures create an imbalance that unfairly penalizes compliant companies while favoring environmentally harmful small-scale operations.
Speaking at KPMG’s post-budget panel discussion, Frempong-Kore criticized the government’s decision to eliminate the 1.5 percent withholding tax on unprocessed gold purchases from small-scale miners, an industry often associated with environmental degradation and tax evasion, while increasing the Growth and Sustainability Levy (GSL) for established mining firms from 1 percent to 3 percent.
“The government has created an imbalanced tax structure by eliminating the 1.5 percent withholding tax for small-scale miners, operations often linked to environmental damage and tax non-compliance, while increasing the Growth and Stabilization Levy from 1 to 3 percent on established mining companies,” he stated.
Background on the New Policies
These fiscal measures were part of the 2025 Budget Statement presented to Parliament by Finance Minister Dr. Cassiel Ato Forson on March 11. The minister justified the tax adjustments as necessary for revenue mobilization and economic stabilization, extending the GSL until 2028 while aiming to formalize the small-scale gold sector through the establishment of the Ghana Gold Board.
However, Frempong-Kore noted that large mining firms already contribute significantly to government revenue through royalties, VAT, and a 35 percent corporate income tax rate. The additional 2 percent non-deductible levy, he argued, creates an undue financial burden on compliant businesses.
“Adding a non-deductible 2 percent GSM levy effectively rewards environmentally harmful operations while penalizing compliant businesses,” he said. “This contradicts our ESG commitments and unfairly burdens those already contributing their fair share to national revenue.”
Mixed Reactions from Industry Players
The Ghana Chamber of Mines has also raised concerns over the tripling of the GSL, citing the lack of consultation and potential negative impacts on investment and sector stability. Some industry stakeholders warn that overburdening large mining firms could weaken Ghana’s competitiveness in the global mining industry.
Conversely, some economists, including Joe Jackson, CEO of Dalex Finance, have defended the government’s new tax measures, arguing that shared economic recovery efforts require collective sacrifices, even if they cause temporary discomfort.
