Government 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

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