Galamsey is driven by desire to evade taxes; activities remain taxable – CITG

The Chartered Institute of Taxation Ghana has joined numerous calls for the ban on illegal mining, highlighting its negative impact on the environment and the government’s revenue generation capacity.

In a press statement on Thursday, 12^th September, signed by its president, George Ohene Kwatia, the Institute noted that not only does illegal mining, also known as malmsey, degrade and destroy the environment, but it also constitutes a drain on the economy due to the urge for tax evasion by promoters of the activity.

“Beyond the environmental degradation, pollution of water bodies, and destruction of farmlands, illegal mining operations are fundamentally driven by, among others, tax evasion. Operators engage in these illicit activities to avoid falling under the regulatory framework, thus bypassing taxes that are imposed on legal mineral operations in Ghana,” the statement read in part.

“The laws of Ghana clearly regulate the purchase and sale of gold, meaning the government should at all times 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,” it added.

The professional tax body, however, emphasised that under both Ghanaian law and global standards, illegal activities remain taxable, urging key international finance partners to address tax evasion from illegal mining in their recommendations and agreements with the government’s revenue measures.

“The Institute (CITG) highlights that under Ghanaian law, the illegality of an activity does not exempt it from taxation. This principle is globally accepted and has been affirmed by the courts. As such, CITG calls on the International Monetary Fund (IMF), the 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.”

It also urged the Ministry of Finance and regulatory bodies to use all available intelligence and resources to identify and tax individuals involved in illegal transactions, alongside enforcing other legal consequences.

CITG further observed that illegal mining in Ghana’s gold sector is causing revenue losses due to unaccounted gold exports and undervaluation. According to them, a holistic approach targeting miners, supply chains, financiers, and profiting entities can recover lost revenues.

The Institute called for an immediate and strict enforcement of mining and tax laws to address the situation.

Click to read the full statement from the Institute