Features
The National Assayer – PMMC’s role in providing revenue assurance to government on gold exports
On 26th January, 2022, www.myjoyonline.com published a story captioned “Ghana loses over $2bn in taxes to undervaluation of gold exports”. According to the story, these losses were identified through a research by a consortium including the Institute for Statistical, Social and Economic Research (ISSER). It is observed that the research, which covered 2011 to 2017, does not disclose which sector it focused on – large scale or small scale. This distinction is important because the two have separate tax regimes.
Undervaluation of Gold
Upon reading the news story, the press release by the research team and the presentation of the research findings, it is difficult to ascertain the basis for the claim of undervaluation.
Undervaluation of a commodity such as gold presupposes that there is a true standard value against which the commodity can be measured. The standard value of gold is easily verifiable. Within the international market, bodies such as the London Metal Exchange (LME) are reputed indicators of the global market price for gold. It is important to mention that the prices as set by the LME on a daily basis are for refined gold of 99.99 per cent 24 karats purity. Gold exported from Ghana are unrefined and hence would not attract the same price as set by the LME.
Within the precious minerals industry, it is trite knowledge that gold values are dependent on weight and purity. Hence, a kilo of unrefined gold would not have the same price as a kilo of refined gold. Similarly, two kilos of 14karats gold could be less expensive than a kilo of 22 karats gold. Given that gold exported from Ghana are in unrefined doré form with a purity range of about 21 carats to 22.5 karats, without an independent valuation exercise, it will be misleading to say that such gold doré has been undervalued using the prevailing world market price as benchmark.
Valuation of Gold
As earlier indicated, two variables go into the determination of the value of gold – weight and purity. Measuring the weight, which is done with a scale, is quite easy and straightforward. Determining the purity of gold is through a scientific process known as assay.
There are various methods of assay – non-destructive methods such as X-ray Fluorescence (XRF), Specific Gravity or Density, and Ultrasonic Testing; and the destructive method which includes the Cupellation (Fire Assay).
Once the weight and purity are identified, a calculation is done using the world market price to ascertain the true estimated value of the gold doré.
From the foregoing, therefore, it is deductible that to substantiate a claim of undervaluation, it is important to know the weight and purity of what was exported as well as the then prevailing world market price of gold. Undervaluation may arise where there is a false declaration of the weight and purity of the gold doré which is being exported. The report, however, does not indicate whether there were any such findings of false declarations of weight and purity.
As earlier mentioned the research fails to disclose which sector of the gold mining industry it focused on – small scale or large scale. This is important because the two have distinct tax regimes. Whereas the large scale sector has a tax regime which includes royalties and corporate tax, the small scale sector presently attracts a withholding tax of 1.5 per cent on gold exports.
PMMC’s Mandate as National Assayer
In 2017, President Akufo-Addo directed that government identifies a way to independently verify gold exports in order to ensure that the country is obtaining maximum revenue for this precious mineral resource. Consequently, under the leadership of Hon. Kiston Akomeng Kissi, PMMC Board Chairman and driven by Hon. Kwadjo Opare-Hammond (may his soul rest in peace), then Managing Director of PMMC, stakeholder engagements began towards the implementation of this directive. There were several engagements with the Ghana Chamber of Mines and the Association of Gold Exporters, now Chamber of Bullion Traders, Ghana to agree on modalities for the smooth take-off of the National Assay Programme. Eventually, with the support of the Vice President and the then Sector Minister, in February 2018, PMMC officially commenced operations as the National Assayer with the mandate to assay all gold earmarked for export from Ghana.
The National Assay Laboratory located at the Kotoka International Airport, from where PMMC carries on its operations was set up through the support of the Minerals Commission with funding from the World Bank. The Assay Lab is fitted with three non-destructive assay equipment – an XRF Machine, a Specific Gravity equipment and Ultrasonic Testing device.
PMMC’s mandate as National Assayer covers both the small scale and large scale mining sectors. As National Assayer, PMMC independently verifies the weight and purity of the gold doré being exported in order to ascertain its value. The value as determined by PMMC enables the Ghana Revenue Authority (GRA) to exact the requisite taxes such as the 1.5 per cent withholding tax on the gold doré before export.
For the small scale sector, after the assay analysis by PMMC, the export is managed through the ICUMS systems with close supervision by the Central Bank. Exports are done by duly licensed export companies who are required to repatriate 80 per cent of the proceeds back to Ghana within thirty (30) days. Failure to show proof of repatriation of export proceeds comes with sanctions such as prevention from doing further exports and upon persistent breach, revocation of export licence and possible prosecution.
For the large scale sector, whose tax regime is entirely different from that of the small scale, PMMC has field officers who observe the smelting of gold in their gold rooms. From the gold room, the weight of the bars are recorded and samples taken. The samples are transported via helicopter to the National Assay Lab where PMMC conducts the assay analysis to determine the purity and by extension the values of the gold doré which are to be exported. This provides an independent verification of the export values thereby providing revenue assurance to government. Periodic reconciliations are carried out between PMMC and the large scale mining companies represented by the Ghana Chamber of Mines.
It is worth mentioning that since the commencement of the Domestic Gold Purchase Programme by the Bank of Ghana in June 2021, PMMC as National Assayer has been providing this essential service to the Central Bank by independently verifying the weight, purity and by extension value of gold supplied for purchase.
Digitalisation of National Assay Laboratory
Since the commencement of the National Assay Programme in 2018, there have been consistent efforts to make improvements so as to ensure maximum efficiency of the programme. In 2021, again under the leadership of Hon. Kissi, with support from the Sector Minister, Hon. Samuel A. Jinapor and driven by the present author, the National Assay Programme was digitalised. Digitalisation now made it possible to generate assay certificates which bore unique security features making it difficult to forge to facilitate the dubious elaborate schemes of gold scammers.
Digitalisation has also now made it possible to monitor in real time, gold exports passing through the National Assay Laboratory. It has improved collation of timely data on export figures and revenues in order to aid effective national economic planning.
The digitalised National Assay Lab, which will be officially launched this month, will be open and accessible to key stakeholders including the President as the Constitutional Trustee of Ghana’s mineral resources, the Vice President as Head of Economic Management Team, the Minister of Lands and Natural Resources, the Minister of Finance, the Governor of the Bank of Ghana, and the Commissioner General of the Ghana Revenue Authority.
PMMC continues to find ways to improve upon the execution of this important mandate which is critical for securing the much-needed revenue from the precious minerals industry for national development.
By Nana Akwasi Awuah, Managing Director, Precious Minerals Marketing Company (PMMC)
THE state of feeling rejected, could be a terrifying experience especially for those who have become used to fame. If not properly addressed, it could lead to depression and the consequences, could be disastrous.
When you are on top of your game in whatever profession you find yourself such that you become famous, a lot of people try to associate with you. The phone never ceases to ring and one is tempted to feel loved and very important.
When a disaster strikes and the fame or the money which was the source of the attraction fades away, the circle of friends and fans begin to shrink and the phone will start to stop ringing until the call stops voting completely.
You will be shocked at how people you considered friends, will no longer be calling you or pay casual visits as they used to. You will begin to notice that messages you leave after calling them and not getting a response are not replied to and that is when you begin to know who your true friends are.
One of the most popular movie stars was an actress called Sharon Stone. In an interview with one of the media houses that was published, she spoke about how people who should have come around to encourage her in her moment of depression, shunned her. The calls stopped coming.
This is what the Bible admonishes that the arm of flesh will fail you and therefore we should put our trust in God. It could be a very frightening experience and can easily lead to depression.
Human nature being what it is, people will want to get close if things are okay. Everybody wants to associate themselves with interesting things, famous people, rich people etc for mainly selfish reasons.
We need to develop the habit of putting our trust in God and relying less on human beings. The lesson we have to take along in life is that, no one marries his or her enemy so how come people who took vows that they will love each other become so hostile to each other that they want to go their separate ways in life? Such is the reality of life.
It is therefore prudent for people to recognise that, life is full of uncertainties and so there is the need to prepare your mind for uncertainties so that when they occur, they do not disorganise your mental sanity.
A lot of people have experienced situations where people who they could have sworn will never betray their trust have disappointed them when they were through challenging moments.
If there is one thing famous people should desire, it should be the ability to identify who are true friends are. Countless stories abound regarding incidence of celebrities who have lost their shine and their wives divorcing them soon after.
It is sometimes useful as a famous or rich person to sign a prenuptial agreement before marriage to safeguard or protect yourself from any future unpleasant surprises.
People can be very pretentious these days, it goes both ways. There is this real life story where a man married a divorced wealthy woman and convinced her to sell her house so they could build a new one together, with the excuse that people are gossiping that he is being housed by a woman.
The woman agreed and they put up a new building. After a few years the man asked for a divorce, only for the woman to realise that the land on which the building was situated, was bought in the man’s name.
This can drive a person insane, if you are not mentally tough and this happens to you. When people hear that you are homeless, a lot of your so-called friends will stop calling, so that you do not become a burden on them.
By Laud Kissi-Mensah
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‘But, er …. I don’t even know your name’.
‘Paul. Paul Allotey. I’m Sarah, by the way. Paul, why don’t you leave me here, since this is the last important thing I’m doing today’.
‘Okay. Now Sarah. I was just thinking. You will be here at the cafe for about an hour. By then it will be about twelve thirty. Then, you would be thinking of buying yourself some lunch, to eat here or to take home. So if you would please allow me, I will take you to one of the nicest eating places in town, and after you have sorted that one out, then I can drop you home. Just that one errand, then I won’t bother you again’.
‘You are not bothering me at all. You are being very kind to me. And I just realised you are a mind reader too. The last item on my agenda was lunch’.
‘I’m so glad I appeared at your doorstep, just in time’.
‘Okay. Now Paul, since you say the cafe is a comfortable place, let’s go in together, and you can do your work while I get my application done’.
‘Okay, Sarah. Thanks. Let’s go’.
We got back in the car at eleven forty-five.
‘So where are we going, Paul?’
‘To Royalty restaurant. It’s a twenty minute drive away’.
‘So, do you enjoy your job?’
‘Most certainly. I won’t change it, not even to be President. And am I right to say that you are preparing to enter the university?’
‘That’s my plan. I hope it works’.
‘It will, if you are determined, and disciplined. You look very much like a disciplined person’.
‘Thank you very much’.
We arrived at Royalty in twenty-five minutes, ‘You are joining me for lunch, Paul’.
‘Thanks for the honour, Sarah. But the bill is on me’.
‘Aren’t you taking on too much for one day?’
‘I never do anything that is bigger than me, Sarah’.
Over the next hour and a half, we discussed fashion, local and international politics, and sports, as we ate and relaxed. Finally, he drove me to the shop.
‘I will never forget you, Paul’.
‘I’m glad to have been helpful. But if you don’t mind, I’ll say it again, your husband is extremely lucky. You are really beautiful’.
‘Thanks again. But do you mind if I call you sometime in the future?’
‘Certainly not. Let me write it here. I will not ask for your number, for obvious reasons. But I will be looking forward to hearing from you. And hopefully, I will see you next month, when I call to drop your bill’.
‘Okay Paul. See you then’. What a lovely day, I said to myself as I opened the front door. I closed the shop and got home by seven. I went straight to the bedroom, stood in the mirror and took a good look at myself. ‘You are a very beautiful woman, Sarah. Never forget that’. I will not forget that, again.
Over the next several weeks, Martin and I had very little to do with each other. In the morning he ate his breakfast and after a shabby ‘I’m going’, he left. He came home around eight at the earliest, ate his dinner and, already soaked in beer, went off to sleep.
He spent the greater part of the weekends at the club house with his friends, playing tennis and partying. My mind was focused on furthering my education, so I didn’t complain to him, and didn’t bother to inform my parents about what was happening. I had decided that I would only take action if he lifted his hand against me again. I spent my free time reading all manner of interesting stuff on the internet, and chatting with my sister on WhatsApp.
One evening, he came home at about eight, rushed to the bedroom and rushed out. An envelope, obviously containing money, dropped out of his pocket, and I picked it up and followed him. I was going to call him and give it to him, but I noticed that there was a young woman in the car, so I went back in, counted it and put it in a drawer in the hall. He came back after some ten minutes.
‘Excuse me, I dropped an envelope containing money. You must have seen it’.
‘Yes, I saw it. Actually, I followed you, and was about to call you and hand it over to you when I realised that there was a woman in the car, so I came back in. I counted it. One thousand cedis.
‘Well let me have it. I have to be going’.
‘I will let you have it if you will tell me who the woman in the car is, and why you are going to give her that amount of money’.
‘Listen, if you waste my time, I will teach you a lesson you will never forget. Give me the money now!’
‘Here’s what we will do, Martin. I know you will give money to her anyway, so I will give it to you, if you will withdraw the threat you just issued. But I want you to know that I will be taking some steps from tomorrow. Things are getting out of hand’.
‘Okay, I’m sorry I threatened you. Can you please give me the money’. I handed it over to him, and he ran out’.
The following morning, I waited for him to finish having breakfast, and told him I wanted to have a word with him urgently.
‘You better be quick. You know I’m going to work’.
‘Well, I want to inform you that I will inform my parents, and your parents, about the situation in this house. As I said yesterday, things are getting out of hand. You spend most of your time drinking. You get drunk every evening, and through the weekend. And you are also spending your time and money on a prostitute’.
‘How dare you? One more stupid word from you …’
‘Am I lying, Martin? You have just started life, yet you are behaving like a rich, elderly man who has already seen his children through university, and can afford a life of fun. As I said, I’m going to inform our parents. Maybe your parents can straighten you out before it is too late’.
‘Look, we can talk this evening. It’s nothing like what you are saying’. He walked away, shocked.
That evening, I was expecting to have a meaningful discussion with him, but his mother called early in the evening to offer me some ‘advice’. Her son had called to say that certain developments at home were disturbing him so much that they were beginning to affect his work.
And, ‘as a loving mother to her daughter’, she was advising me to submit to my husband, and support him in prayer, and not ‘drive him from home’. Men would always be men, and she was telling me ‘from experience’ that no matter how much time Martin stayed away from home, he would always come home to me.
She had been a young wife before, so she understood the challenges I was facing. So I could be assured that if I followed her advice, all would be well. And, of course, she didn’t allow me to tell my side of the story.
Martin came home very late, and very drunk. And from the next morning, he carried on as before. With some hesitation, I called my dad and told him all that had gone on.
‘Well, my daughter. I’m not going to say “I told you so”. I was only trying to protect you. So here’s what we’ll do. Continue doing the best you can, and try not to give him any excuse to harm you, but if things continue to deteriorate, I will take you back.
A couple of days later, my cousin Dinah arrived in Accra from Brussels, having completed her medical course. With Martin’s agreement, I went to Koforidua and spent a couple of days. I spent most of the time chatting about her experiences in the US, but we also discussed my relationship with Martin, and she endorsed Dad’s decision to take action if Martin’s behaviour did not change after two weeks Elaine informed Mom and Dad. We endorsed Dad’s decision to take action if there was no change in two weeks.
Dinah returned with me to Takoradi. Her plan was to spend a couple of weeks, and return to Accra to be posted. I called Paul Allotey, and asked if he would meet her for lunch and, if possible, show her some interesting spots. Delighted, he suggested that we meet at Royalty the next day.
I told Martin about it, to remove any possibility of future disagreement over ‘going out with men’.
‘It’s fine with me’, he said, ‘if, of all the people who could show your sister round this town, you chose a borla man. Doesn’t that indicate the kind of person you are?’
‘ First of all, Martin’, I’ve spoken to him a few times, and he comes across as a decent guy, so I think it is rather unfortunate that you are writing him off when you don’t know him’.
By Ekow de Heer
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