The Tax Justice Coalition Ghana (TJC-G) – known for working at the local and national level to complement regional and continental efforts to deliver tax justice, has urged government to seek a comprehensive external debt restructuring with its creditors to help bring the country back on the path of debt sustainability.
That, the Coalition said, was the only means the country’s current debt and macroeconomic crisis could be addressed.
Commenting on the 2023 annual budget, the Chairman of the 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.
The Chairman, while addressing a news conference in Accra pointed out that 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, as revealed by Mr. Azeem, was done by the Tax Justice Coalition Ghana in collaboration with Actionaid, as part of an advocacy programme between the two organizations for a progressive tax regime for the country.
According to Mr. Azeem, 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 is the need for the external debt restructuring.
Ghana’s Tax System
Emphasizing on the tax issues in the 2023 budget, Mr. Azeem noted that 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.
Mr. Azeem further averred that the tax measures, such as the increase in Value Added Tax, the Electronic Transaction Levy (E-Levy), and Communication Service Tax would increase transport fares and food prices, hence, worsening the country’s inflation.
“We are calling on the government not to implement the 15 percent VAT increase and totally scrap the E-Levy, but rather focus more on implementing the more progressive taxation of income and property.”
Mr. Vitus A. Azeem
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).
With the external debt restructuring, the Country Director of Actionaid, Mr. John Nkaw said 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, the Actionaid Country Director communicated that 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.
Not limited to that, a Policy Analyst of ISODEC, Mr. Bernard Anaba, also disclosed that debt forgiveness was not something new, stressing that under the Marshall Plan to develop Europe, most of Germany’s debts were forgiven by its creditors.
“Debt relief would help Ghana to start on a clean plate and bring the country on sustainable debt levels – leading to economic development.”
Mr. Bernard Anaba
Read also: GITC Turns Down Request to Waiver On Anti-Dumping Duty on Asadtek Group Consignments
