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Monday, January 30, 2023

Debt Exchange: Pay income tax too

Pressure group OccupyGhana has called for the removal of the tax exemption privilege enjoyed by the President.

This comes on the back of government’s debt exchange programme amidst the prevailing economic situation.

In a statement, the group said it considers the debt restructuring programme as nothing more than an offer from the government to institutional portfolio investors to accept new terms that vary the terms under which the latter acquired the government’s securities.

“Let the president pay income taxes too. We should remove the tax exemption granted to the President under article 68(5) of the Constitution. While the actual savings from this might not be much, it is hugely significant and relevantly symbolic.

“The president must lead by example. When he pays his taxes, then he can demand that the rest of us pay taxes, too,” the statement read in part.

As part of measures to stabilise the economy, the Finance Minister, Ken Ofori-Atta, has launched the programme which has been met with stiff opposition.

Under the programme, domestic bondholders have been asked to exchange their instruments for new ones while existing domestic bonds, as of 1 December 2022, will be exchanged for four new bonds maturing in 2027, 2029, 2032 and 2037.

Also, the annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.

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But OccupyGhana thinks that the Government has no power under the law and the Constitution to unilaterally impose fresh terms on portfolio investors; negotiation and the mutual consent of all parties will be required.

OccupyGhana has, therefore, proposed alternatives to the government which include the removal of the tax exemption the president enjoys.

The group also reiterated several calls on President Akufo-Addo to downsize his government.

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