Stop the erosion of public financial resources -Tax Justice Coalition to gov’t

The Tax Justice Coalition has urged the government to put measures in place to stop what they describe as the erosion of public financial resources through the granting of tax incentives and tax breaks to multinational companies operating in the country.

The coalition believes it is time for the government to scrap wasteful tax incentives benefitting wealthy elites and corporations and prevent multinational corporations from shifting profits to low and zero tax countries.

That was disclosed by the Chairman of the Tax Justice Coalition Ghana, Mr Vitus Azeem, at a press conference in Accra, which formed part of the coalition’s activities to mark the Global Tax Week celebrations.

The theme for the press conference was ‘Towards tax justice in a post-pandemic world; a struggle against the neoliberal agenda’.

He said the call for tax justice over the years had never been any less appropriate but the COVID-19 pandemic had made it even more important this time.
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He said the pandemic had exposed sharp inequalities bred by a global system founded and thriving on profit and greed.

“The impact is disproportionally hitting the poorest and most vulnerable in society. Nowhere is this worse than in developing countries where multiple and chronic crisis have reduced countries to poverty, increased our dependence on debt and eroded our resources and capacity to build sustainable societies and economies.

“As if this was not enough, tax policies that grant generous tax incentives and tax breaks are introduced to attract foreign direct investments. The grave consequences of such macro-economic policies are compounded by a broken international financial architecture that enables illicit financial flows, tax evasion, and tax avoidance by the wealthy elites and multinational corporations,” he stated.

That, he said, undermined the country’s capacity to mobilise the resources needed to invest in social sectors and sustainable development.

Prioritising private sector

Mr Azeem pointed out that the government had over the years prioritised the private sector’s interest over people’s welfare and well-being for decades, rendering them inept and unprepared to address the COVID-19 crisis.

“When the government announced a stimulus package for micro small and medium enterprises (MSMEs), the priority has not been the welfare of people but profit,” he noted.

He, therefore, urged the government to alleviate the economic burden of the poor and the vulnerable by repealing regressive consumption taxes such as VAT and goods and services taxes that increase the burden on the poor and marginalised.

Tax Credits

Mr Azeem also called for the need to grant tax credits to single-headed households, MSMEs, low income earners, dependents and also grant tax credits to women for unpaid care work.

“There is no tax justice without fiscal and economic justice. The government must also implement fiscal spending measures that invest in quality public services for all and universal social protection.

“It must also carry out necessary public investments and assistance to ensure food security and food sovereignty during and after the crisis and to provide public services that address and fulfil the rights and needs of women,” he pointed out.