2020 Budget: Business implications and new companies act

This year’s Business Breakfast organized by CCI France Ghana was held Thursday 6th February at the Accra Marriott Hotel. The event focused on the topic The State 2020 Budget: Its Business Implications and the New Companies Act, which gathered 90 participants, members and associates.

The event was facilitated by Tax and Finance experts from KPMG, along with legal advisors from B&P Associates as well as AB Lexmall & Associates Lawyers.

The first presentation by KPMG focused on the business opportunities for this financial year.

The areas covered include taxation, the state’s key initiatives and strategic pillars of the 2020 budget. Representative from KPMG, Mr. Gordon DADEY mentioned that the government’s priority for the year is to focus on Domestic Revenue Mobilization by implementing the main pillars as mentioned above. The audience was also informed about the method of the state’s strategy to allocate funds for developing and concentrating on Health, Education and Infrastructure sectors. The allocated budget for 2020 in comparison to last financial year suggests a reduction in funds for some sectors.

The tax expert however, mentioned that these reductions only implied the transfer of the funds to other venture for development. The other aspect of the 2020 Budget which should appeal to businesses include the drive for FDIs with focus on SMEs, development in the transport-aviation sector (the national air carrier), marine infrastructure, energy and trade & industry sectors.

In relation to taxation, there was no new tax reform introduced. However, there shall be a digital transformation of the Ghana Revenue Authority: Digital Taxpayer Experience, to ease the normal process of filing taxes in the country.

Final elements to the presentation revealed a forthcoming abridged version of the tax reform made available to the public, as well as an adjustment of personal income tax.

The next presentation focused on the New Companies Act, led by Mrs. Fawzya Medhat KHALIL from B&P Associates focused on four main areas for discussion.

The Companies Act, 2019 (Act 1992) is an upgrade of the 1963 version. It highlights major changes for good Corporate Governance and Transparency in the system. The expert identified the new key areas that have changed in the New Act. It shall have an autonomous governmental body called The Office of the Registrar of Companies, with a 2-year period to set up this office by 2021.

She added that the New Act has accommodated a method of digital communication to enhance better service in terms of following procedure: filing annual returns, incorporation of business and merge sale of undertakings. With no minimum capital required and no requirement of certificate to commence business, there are some sector specific and GIPC requirements that will not be overlooked.

Other changes in the New Act include: Regulations now termed as Constitution and the introduction of suffixes that determine a type of company apart from LTD: PRUC, PUC, LBG and PLC.

A major change also identifies having an auditor for no more than 6 years.

The final presentation was led by Dr. Kweku AINUSON from AB Lexmall & Associates Lawyers, who highlighted the changes of the New Act affecting Directors, Company’s secretary and shareholders.

Dr. Kweku focused on the process and definitions of each entity of a business or company. He explained the legal role of a Director, Company’s Secretary and Shareholder respectively. There was also the emphasis on what did not define one as a Director, Company’s Secretary and Shareholder and the penalties involved if any of the parties flouted the law. This presentation introduced and touched on practical definitions to better understand the roles of each entity in order to adhere to the New Act.

This followed a question and answer session that addressed concerns and doubts regarding taxes and the new changes in the New Act. It was however clarified that as the New Companies Act was introduced last year, there is still upgrade of the system. This implies sticking to the Constitution in theory and company using its discretion in terms of applying the law in a practical situation.

CCI France Ghana

The Chamber of Commerce and Industry France Ghana is an association of 150 companies and professionals within various sectors of activity which aims at supporting, fostering and enhancing bilateral trade and investment relations between French and Ghanaian companies.

With over 20 business sectors represented, the CCIFG acts as a business support system to its members and Partners by providing information through market studies, product-market testing, prospective missions as well as trade shows.

To contribute to business growth for members, CCIFG continues to organise informative events to share practical information and create a platform to establish new business partnerships.

The Business Breakfast organised comprises the activities by the CCIFG to provide impactful information needed for business activity available to its network.