Business News Mon, 28 Oct 2019
The stability of the cedi, cost of clearing at the ports as well as Ghana’s tax systems have emerged as key concerns for businesses ahead of the presentation of the 2020 budget and economic policy of the government.A survey by auditing firm, KPMG has shown that the ability of the government to address these issues should propel the growth of businesses and their contribution to the economy.
The study interviewed thirty-five (35) businesses spanning industry and manufacturing, agribusiness, banking, media, oil and gas, amongst others.
It looked at the perception of the businesses on the impact of fiscal measures, support from the government as well as key expectations from the 2020 budget.
It emerged that the stability of the cedi ranked number one concerning priority attention businesses seek from the government.
This is backed by the fact that 64.7% of the businesses surveyed cited the exchange rate stability as the single most important item which needs attention from the government.
Again, on the support businesses require from the government, the clearing of goods at the port topped the list. This was followed by retraining and upskilling talent as well as the need for the tax laws in the midyear budget review to be changed.
Meanwhile, businesses which were claiming NHIL and GETFund levies as part of their cost of production want the government to restore the system. The cancellation of the claims followed the conversion of the two levies into straight ones in July 2018.
“34% of respondents felt they were significantly impacted by the reduction in VAT/NHIL input rate from 17.5% to 12.5%. Analysis of survey responses provided evidence for a largely negative view of the VAT/NHIL input rate reduction, with businesses indicating it added to their cost of production,” the survey noted.
In addition, businesses want issues of cost and access to credit as well as cost and quality of utility services to be critically addressed.
“If the cost of clearing is reduced, it helps to sell at cheaper prices to increase sale turnover,” one respondent remarked.
The Finance Minister, Ken Ofori Atta is expected to present the budget to Parliament on November 14.
Amongst others, the minister will outline key expenditure and revenue targets for next year.
As the country prepares for the general elections next year, the government has been encouraged to regulate its expenditure so as not to overrun its budget. This, the KPMG also believes could help stabilize the cedi.