Latest update January 1st, 2025 1:00 AM
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Stemming smuggling…Govt. not reducing gold royalties anytime soon
Government is not immediately contemplating lowering royalties and taxes on gold to stem the
Minister Raphael Trotman
country’s huge smuggling problem.
With Guyana boasting a high rate compared to neighbouring Suriname, Brazil and other places, smugglers have been capitalizing, raking in millions in profits.
Last year, the country’s losses from gold smuggling was an estimated US$40M (G$8B).
In 2015, the country earned approximately that amount.
Observers have been recommending that Guyana lower the seemingly high seven percent charged on every ounce of gold declared – royalty (five percent) and tax (two percent).
It was argued that critical resources used to tackle smuggling would be significantly reduced with the lowering.
Asked about it on Wednesday, Minister of Natural Resources, Raphael Trotman, who is charged with responsibilities for the gold sector, hinted that lowering the royalty and tax may not be the route that the administration is taking anytime soon. He explained that there is no empirical evidence to show that if the taxes are lowered, it will automatically lead to a rise in declaration.
“We have to examine the reasons why people are smuggling gold. Some of it has not only to do with a better price which can be obtained in Suriname, some of it has to do with hiding income to avoid taxes altogether.”
He said that it is believed that smuggling may be used as a means of laundering illicit or illegally obtained money.
He added that from research, lowering of the royalties may only lead “marginally” to higher declarations.
The issue of gold smuggling is a major one being tackled by the David Granger-led administration which took office in May last year after early general elections.
Gold declarations faltered about 20 percent, falling behind during the first half.
However, miners rallied and together with large scale producers like Guyana Goldfields Inc., the industry flew past its target, by almost 60,000 ounces, to 451,000 ounces.
The US Federal Bureau of Investigation and Department of Homeland Security have been helping Guyana tackle gold smuggling, sharing information on persons of interest.
Meanwhile, on Wednesday, Trotman, in introducing Simona Broomes as the Junior Minister, disclosed that he is looking to place more staffers from the Guyana Geology and Mines Commission (GGMC) in the fields.
The minister was responding to questions from Kaieteur News about capacity of GGMC, especially with regards to plans to increase monitoring of the gold and logging operations.
Addressing the media at the Ministry’s first press conference for this year, Trotman explained that GGMC’s administrative staff is larger than its field and operational workers “and I think we may want to put more people in the field to do more monitoring and evaluation, and enforcement”.
Minister Trotman likened this move to that of the Guyana Police Force which has also decided to “put more boots on the ground”, and have more ranks visible within communities, to increase effectiveness. The move by the GGMC will see more “in-house staff exposed in the field”, he added, as ”there are no immediate plans to hire more staff.”
The Ministry will be moving towards greater partnerships with the Ministries of Public Security, Public Infrastructure, Public Health, Communities, Indigenous Peoples’ Affairs and other agencies which are in contact with hinterland residents.
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