The Chartered Institute of Taxation, Ghana (CITG), has expressed deep concern over the ongoing issue of illegal mining (galamsey) and the significant tax evasion associated with it.

According to CITG, beyond the environmental degradation, pollution of water bodies and destruction of farmlands, galamsey operations are fundamentally driven, among other factors, by tax evasion.

In a press statement issued by the President of CITG, George Ohene Kwatia, on Thursday, September 13, it was noted that operators engage in these illicit activities to avoid falling under the regulatory framework, thereby bypassing the taxes imposed on legal mineral operations in Ghana.

The statement explained that Ghana's laws clearly regulate the purchase and sale of gold, meaning the government should always know the total output from licensed mining activities.

“However, the illegal nature of Galamsey undermines this regulatory structure, creating a shadow economy that deprives the nation of critical revenue. CITG notes that the responsibility to address this issue does not lie only with the miners but also with all actors involved, including those who supply the equipment for Galamsey operations, those who deal in chemicals used in the process and buyers and traders who purchase gold from illegal miners,” part of the statement read.

CITG further stated that under Ghana's law, the illegality of an activity does not exempt it from taxation, noting that this principle is globally accepted and has been affirmed by the courts.

“As such, CITG calls on the International Monetary Fund (IMF), World Bank and other international bodies to show concern in dealing with tax evasion caused by Galamsey in their recommendations and agreements with the Government of Ghana’s Revenue Measures. 

“We also call on the Ministry of Finance and other regulatory bodies to utilise all available intelligence and resources to identify and tax those involved in these illegal transactions, in addition to any other legal consequences,” the statement said.

The statement also noted that illegal mining has been found by some researchers to significantly impact Ghana's gold sector, causing revenue losses due to unaccounted gold exports.

It explained that this discrepancy, caused by smuggling and the undervaluation of gold exports, leads to a loss of tax revenue.

“Addressing Galamsey is crucial to safeguarding Ghana’s tax revenue. It is crucial that we adopt a holistic approach, targeting not only the miners but also the entire supply chain, including financiers and those profiting from the illegal trade in gold. By taxing these entities, Ghana can recover significant revenues that are currently lost due to the evasion of taxes,” the statement added.

CITG called for immediate and coordinated action from all stakeholders, including the government, chiefs, IMF, and World Bank, to curb illegal mining and its associated tax evasion.

“The nation stands to benefit significantly from a more regulated, transparent, and accountable mining industry. Illegal mining, in its current state, is robbing Ghana of vital revenue that could otherwise support national development projects and the welfare of citizens.”

CITG reaffirmed its commitment to working with the government and other relevant agencies to address this challenge and restore integrity to the mining sector in Ghana.