The Government of Ghana has abolished the 1.5 percent withholding tax on unprocessed gold purchases from small-scale miners, a move aimed at curbing gold smuggling and boosting formal trade.
Finance Minister Dr. Cassiel Ato Forson, who announced the decision in the 2025 Budget Statement, explained that the tax was fueling illicit gold exports, depriving the country of foreign exchange earnings.
“We engaged the industry, and they flagged it as a major driver of smuggling. Removing it will ensure gold stays within Ghana,” he stated in an exclusive interview with Tv3 on Friday, March 14, 2025.
How the Tax Fueled Smuggling
Small-scale miners have long argued that the withholding tax made official gold transactions costly, pushing them to sell through informal and often illegal channels where they could avoid taxation.
Ghana, a top gold-producing nation, has struggled with smuggling, with reports indicating that significant volumes of gold leave the country through unregulated routes, denying the state crucial revenue.
The tax removal is expected to make it more attractive for miners to sell through legal avenues, ensuring better oversight and proper revenue collection.
The Ghana Gold Board’s Role in Regulation
As part of efforts to formalize the small-scale gold trade, the government is setting up the Ghana Gold Board, which will regulate purchases and act as the primary buyer of gold from small-scale miners.
Dr. Forson highlighted that the Gold Board’s establishment will ensure that gold sales contribute to national economic growth and foreign exchange reserves.
Other Scrapped Taxes
The government has also scrapped several other taxes. Dr. Forson announced the removal of the 10 percent withholding tax on lottery and betting winnings, popularly known as the betting tax. He noted that this was in line with the government’s commitment to fulfilling its campaign promise.
“We made a social contract with the people of Ghana to remove the betting tax, and we have delivered on that promise,” he stated.
The government has also abolished the COVID-19 Health Recovery Levy, a tax that was introduced during the pandemic but remained in place even after restrictions were lifted. Dr. Forson explained that removing the levy was necessary to ease the financial pressure on businesses and individuals.
The E-Levy and Emissions Levy have also been removed as part of the government’s efforts to support digital transactions and environmental policies without placing additional financial burdens on the public.
Additionally, the government has amended the tax laws to exempt workers earning the minimum wage from income tax, a measure aimed at providing relief to low-income earners.
Mixed Reactions from Stakeholders
Some industry players have welcomed the tax removal, stating that it will encourage compliance and increase official gold sales. Others, however, have called for stronger border controls to prevent smugglers from exploiting gaps in enforcement.
