Business News of 2014-07-08

'Tax holidays for foreign firms don’t help’

Granting tax holidays for foreign companies to the detriment of their local counterparts will not help develop the economy, Nii Kotei Dzani, Group Chief Executive Officer of Ideal Financial Holdings Limited, has said.

Dr. Dzani said most of these foreign companies leave just after the holiday period and repatriate all their profits, putting pressure on the local currency.

“Granting tax holidays to foreign companies and over-taxing local ones to near-collapse will not grow the economy. There is no economy that progresses with only foreign investors. It is the indigenous industries that expand and grow the economy.

“When we are quick in granting tax holidays and they fold-up, we will continue to wallow in poverty. Meanwhile, if you support the local companies and profits are made, all the profits are retained in the country.”

He was speaking at the unveiling of the new head office of Ideal Capital Partners, the investment banking subsidiary of Ideal Financial Holdings. The occasion was also used to launch the company’s new logo. Ideal Capital Partners provide investment advisory and professional services to help investors unlock opportunities in the money and capital markets.

Dr. Dzani urged government to come up with a policy that will ensure a percentage of profits from foreign companies are retained in the country for development.

“This is one of the ways we can move forward. Government should also reduce its borrowing from the domestic market. When you are borrowing so much from the domestic economy, the banks and other financial institutions will have little money to fund businesses. Government should come out with innovative means of raising capital for development rather than over-borrowing from the domestic market.”

Emmanuel Nii Armah Tackie, Managing Director of Ideal Capital Partners, said the company is bringing its rich experience in fund management in order to stay ahead of the competition.

“We have assembled a team of knowledgeable professionals, and together with our rich experience we will provide tailor-made products to suit the needs of Ghanaians.”

He noted that despite the current economic challenges, Ideal Capital Partners is doing its best to offer superior services to clients.

“It hasn't been all that rosy and we have had our fair share of challenges. The continuous depreciation of the cedi is affecting our business. We believe that once government addresses this issue, we will be able to meet the needs of our clients better.”

Outgoing Minister of State in charge of of Financial and Allied Institutions, Fiifi Kwettey, congratulated Ideal Financial Holdings for expanding the business and employing more Ghanaians.

He also appealed to financial institutions to invest more in long-term projects, and said companies should invest in expansion to achieve real growth instead of the continuous increase in prices of goods and services to increase profit.