The Association of Economists in Suriname (VES) has expressed strong opposition to the government’s recent decision to reduce royalty rates on gold exports from small-scale mining operations. Secretary Swami Girdhari characterized the policy shift as fundamentally flawed, arguing that it effectively rewards illegal gold smuggling activities rather than combating them.
President Jennifer Simons defended the measure during a radio interview on ABC Actueel, explaining that the royalty reduction from 5.5% to 4.5% aims to discourage gold smuggling by easing the financial burden on legitimate mining operators. The administration believes lower rates will incentivize compliance with tax obligations.
However, the VES maintains that this approach represents a dangerous precedent. Girdhari emphasized that “gold smuggling constitutes a criminal offense that damages society. Entrepreneurs engaged in such activities should face prosecution and punishment, not accommodation.” The association further notes the contradiction between this policy and the government’s stated principle that those with greater resources should bear heavier fiscal responsibilities.
The economists highlight additional inconsistencies with the government’s 2026 draft budget, which specifically calls for strengthened tax collection policies, enhanced monitoring mechanisms, and sector-specific approaches to improve compliance within the gold industry. “By reducing royalties now, the government undermines its own announced policy agenda,” Girdhari stated.
The VES recalls that the previous administration’s recovery plan initially proposed increasing royalties from 2.75% to 7.5%, though ultimately settled at 5.5%. This historical context demonstrates the considerable influence of gold industry lobbying efforts, which appear to persist within the current government structure.
Notably, international gold prices have more than doubled in recent years, currently exceeding USD 155,000 per kilogram, while production costs have remained relatively stable. This market dynamic generates substantial profits—even windfall gains—for gold operators, making royalty compliance economically feasible without reduction measures.
The association concludes that smuggling represents an economic crime requiring stringent enforcement rather than concessionary policies. Girdhari posed a rhetorical question: “If retailers suddenly stopped paying value-added tax, would the government reduce VAT rates? If entrepreneurs ceased income tax payments, would those taxes be lowered accordingly? Equal justice must apply to all.”