Sinking fund essential for paying back Eurobonds – PMRC


THE Policy Monitoring and Research Centre (PMRC) has called for the implementation of policies which will provide steady flow of funds for Government to pay back the Euro bonds through the sinking fund method. A sinking fund was a means of repaying funds borrowed through a bond issue complete periodic payments to a trustee who retired part of the issue by buying the bonds on the open market. PMRC executive director Bernadette Deka said  there was need for adequate policies in the national Budget to be implemented that would allow for the sinking fund to have steady flow of funds and allow Government pay back the Euro bonds as stipulated. “Further, Ministry of Finance should look at other reliable ways that will ensure that we are able to service the Euro bonds,” she said. Ms Deka also said PMRC called for practical steps to be put in place that would promote widening of the tax base. She explained that practical steps would result in increased revenue collection for the Treasury. “Mechanisms for taxing the informal sector need to be enforced, as this is the only way we will ensure steps towards widening the tax base. “There should be a deliberate policy to ensure compliance and stick  within budget lines, ” she said. Ms Deka said Government must have a deliberate policy to ensure that informal sector groupings form cooperatives for tax collection, hence expanding the tax net and ultimately increase revenue for the Government. She also said there was need to increase allocation towards ventures that would promote value addition to local produce, especially in the manufacturing industry. “This will call for the creation and re-establishing of some industries; and this also has a bearing on employment,” she said. She said PMRC aligned its expectations according to the focus of the development plan as well as other international protocols such as the Sustainable Development Goals (SDGs).