Finance Minister Dr. Cassiel Ato Forson has justified the government's decision to remove withholding tax on gold sales, arguing that it is a strategic move to curb smuggling and retain Ghana’s gold for economic stability.

Speaking on Joy News’ PM Express on Tuesday, March 11, after presenting the 2025 Budget Statement to Parliament, explained that the policy aims to ensure that gold mined by small-scale miners remains in the country rather than being smuggled abroad.

“We had to do it for two reasons. First, we are establishing the Ghana Gold Board. The objective is that the Ghana Gold Board will buy the gold coming from small-scale miners,” he stated.

According to him, Ghana has been losing significant amounts of gold due to smuggling, mainly to neighboring countries such as Togo, Burkina Faso, and Mali. “

Today, we are seeing the small-scale miners actually smuggling the gold outside Ghana to Togo and Burkina Faso and sub to Mali. And this is obviously as a result of the high withholding tax rate on that.”

Dr. Forson explained that the removal of the tax is part of a broader strategy to mop up foreign exchange (forex) to stabilise the cedi.

“Because of the smuggling, Ghana is not benefiting fully as we should. And so, as part of the strategy to mop up the needed forex to support the cedi, we decided to allow the revenue, that small revenue, to go, and in return, we will be able to mop up the forex from the gold to stabilise the currency.”

He acknowledged that the government was foregoing some revenue but insisted that the long-term benefits outweighed the short-term loss.

“It was an opportunity cost to allow this ¢50 million to stay, as against we make about ¢50 million, so you allow it to go and psychologically bring in the confidence so that they will not smuggle the gold out.

"But rather, you allow the gold to stay in Ghana, and Ghana will be able to benefit from the foreign exchange that we need.”

Dr. Forson also pointed out that the Bank of Ghana, which currently purchases gold, does not pay withholding tax because it is exempted.

He argued that the tax was therefore not particularly beneficial and was instead fueling smuggling.

“The truth is also that currently, the central bank that is buying gold, they don’t pay their withholding tax because they are exempted. And so that tax is not really beneficial, and it is rather allowing smuggling.”

The Finance Minister emphasized that keeping gold in Ghana would not only help stabilise the economy but also ensure that the country benefits fully from its natural resources.

“We felt there’s the need to take it out and allow gold to be able to come into the country, or Ghana’s gold to stay, so that we’ll be able to sell the gold and bring the forex to support the economy.”