Institute for Fiscal Studies (IFS), Economic think tank, is urging the government to devise a comprehensive strategy to generate revenue from the rapidly expanding small-scale gold mining sector.
Presenting the policy institute’s formal analysis of the 2026 Mid-Year Budget Review at a press briefing in Accra, the executive management emphasized that despite explosive growth within the artisanal and small-scale mining (ASM) space, the national treasury continues to suffer a massive fiscal revenue shortfall.
The think tank noted that while small-scale operators have rapidly expanded their overall market share, the Ministry of Finance failed to articulate any structured framework in the mid-year budget review to capture proportionate tax yields from the boom.
“However, government revenue generation from the small-scale mining sector is woeful. This situation should not be allowed to persist. Therefore, it is necessary that the state enjoys a fair share of the benefits from the extraction of these mineral resources by whomever extracts them.”
Institute for Fiscal Studies (IFS)
While on the stark divergence between gold export revenues and fiscal receipts, the IFS presented detailed trade data showing that in 2025, Ghana’s total gold exports surged by a staggering 103.3 percent, climbing from $10.31 billion to $20.98 billion.
Crucially, the small-scale gold mining sector accounted for $10.80 billion representing 51.5 percent of total national gold exports effectively outperforming large-scale commercial miners.
However, state mineral royalties, which depend almost entirely on gold production at roughly 97 percent, only grew by 21.1 percent, rising modestly from $364.87 million in 2024 to $441.82 million in 2025.
This massive gap highlights how the government has largely neglected targeted revenue mobilization within the ASM sector, allowing substantial economic value to slip past the public purse.
Structural Gaps in the ASM Fiscal Regime
The recent institutional rollout of the Domestic Gold Purchase Programme and the operational establishment of the Gold Board (GoldBod) have exposed the true magnitude of small-scale mining in Ghana.
Data unearthed through these state initiatives proves conclusively that ASM output is far larger than official historical estimates ever recognized.
Yet, despite this massive structural expansion, the underlying fiscal architecture remains starkly inadequate.
While large-scale mining entities contribute predictable corporate income taxes, withholding taxes, and mineral royalties, the small-scale mining sector operates predominantly outside the formal direct tax regime.
Dr Boakye insisted that because mineral deposits are publicly endowed assets held in trust by the President for the Ghanaian people, allowing small-scale miners to extract billions of dollars in wealth without paying commensurate taxes represents a fundamental failure of public resource management.
Macroeconomic Implications for Public Finances
The failure to capture tax yields from a $10.80 billion sub-sector carries severe, far-reaching consequences for Ghana’s broader macroeconomic health.
With public debt service obligations consuming a vast portion of domestic revenues, the government’s inability to widen the tax base directly undermines budget execution.
When tax receipts underperform targets, the state routinely responds by cutting critical infrastructure projects, delaying payments to contractors, and suppressing capital expenditure.
This reliance on spending cuts rather than revenue expansion harms non-oil GDP growth and stalls local business activity.
By designing an efficient fiscal framework that captures royalties and direct taxes from small-scale gold producers, the central government could instantly generate billions in non-debt domestic revenue.
This fresh capital would help narrow the fiscal deficit, reduce reliance on high-interest domestic borrowing, and fund vital public services without suffocating the formal corporate sector with over-taxation.
Formalization and Resource Governance Imperatives
To successfully close this revenue generation gap, the government must transition from passive gold purchasing toward active fiscal regulation.
While GoldBod has achieved undeniable success in centralizing gold purchases to build foreign exchange reserves, trading mechanisms alone do not replace comprehensive tax collection.
Policy experts stress that formalizing the ASM sector requires introducing workable taxation mechanisms tailored to the operational realities of small-scale operators.
Implementing flexible flat-rate withholding taxes at licensed buying points, alongside simplified royalty collection systems managed by GoldBod and the Minerals Income Investment Fund (MIIF), would bridge the gap without driving operations underground.
Ultimately, aligning small-scale mining with the broader tax framework ensures that Ghana’s mineral wealth directly funds long-term economic development, transforming record-breaking extractive output into lasting national prosperity.
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