Who bears the tax burden? The withholding tax policy and persistent informality in artisanal small-scale mining in Ghana

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ABSTRACT This article examines the withholding tax policy and the challenges of taxing ASM activities in Ghana. Based on qualitative interviews with operators and stakeholders, the article reveals that the mobile and uncertain nature of operations makes it difficult for state institutions to govern and generate domestic revenue from the sector. Assessment of the withholding tax policy reveals how taxation without ‘actual’ formalization indirectly legitimizes illegal activities. Formalization efforts must prioritize the livelihood security of operators over revenue generation concerns. State accountability and a working social contract are critical to domestic revenue mobilization in developing countries.