Govt urged to seek comprehensive external debt restructuring
The government has been urged to seek a comprehensive external debt restructuring with its creditors to help bring the country back on the path of debt sustainability, the Tax Justice Coalition Ghana has said.
That, the Coalition said, was the only way the country’s current debt and macroeconomic crisis could be addressed.
Addressing a news conference in Accra yesterday on the 2023 annual budget, the Chairman of Tax Justice Coalition Ghana, Mr Vitus A. Azeem, explained comprehensive debt restructuring as Ghana negotiating for all its debts to be forgiven by its external creditors.
He said the external debt restructuring had become necessary to bring stability to the Ghanaian economy.
The analysis on the 2023 Budget Statement and Economic Policy of government was done by the Tax Justice Coalition Ghana in collaboration with Actionaid, as part of an advocacy programme between the two organisations for a progressive tax regime for the country.
He said aside the numerous revenue and expenditure measures in the 2023 Budget Statement and Economic Policy, which will be adopted by government to address the country’s economic crisis, there was the need for the external debt restructuring.
Touching on the tax issues in the 2023 budget, Mr Azeem said though the proposals to freeze new tax waivers for foreign companies and to review tax exemption for free zones, mining and oil and gas companies, some of the proposed revenue measures in the budget pointed to the conclusion that Ghana’s tax system remained more regressive than progressive.
He said the tax measures, such as the increase in Value Added Tax, the Electronic Transaction Levy (E-Levy), Communication Service Tax, would increase transport fares and food prices and worsen the country’s inflation.
“The Tax Justice Coalition Ghana calls on the government not to implement the 15 per cent VAT increase and totally scrap the E-Levy and focus more on implementing the more progressive taxation of income and property,” he said.
Mr Azeem suggested that the collection of property tax should be adopted at the National and not left to Metropolitan, Municipal and District Assemblies (MMDAs).
The Country Director of
Actionaid, John Nkaw, said in the external debt restructuring, Ghana could negotiate for total debt forgiveness, cancellation or relief to give the country debt reprieve.
Touching on the issue of efficient and effective use of the country’s tax resources, he said government must invest the country’s revenue in social services, such as education, water and agriculture to help bring relief to the poor and vulnerable in society.
A Policy Analyst of ISODEC, Bernard Anaba, said debt forgiveness was not something new, stressing that under the Marshall Plan to develop Europe, most of Germany’s debt was forgiven by its creditors.
He said debt relief would help Ghana to start on a clean plate and bring the country on sustainable debt levels to bring development to the country
BY KINGSLEY ASARE