Businesses have underscored the critical need for adaptive policies to bolster business growth and development, amid a backdrop of daunting economic hurdles.
According to the KPMG 2024 Pre-Budget Survey Report, businesses in the country are urgently calling for a comprehensive review of tax policies, improved power supply and a focus on nurturing skilled labour.
These vital recommendations remain a crucial source of insights into the repercussions of government policies on business performance.
The survey, carried out in collaboration with the United Nations Development Programme (UNDP), has garnered responses from businesses spanning various sectors. It has illuminated concerns and aspirations of the business community as Ghana endeavours to achieve economic recovery.
Taxation concerns and recommendations
The report underscores the central issue of adverse impacts from currency depreciation, high inflation, interest rates and the tax environment on business performance throughout 2023. These challenges have been further aggravated by limitations on accessing credit, struggles in retaining skilled labour, power supply constraints and disruptions in the supply chain.
In response, respondents are strongly recommending an extensive reevaluation of tax policies, including the COVID-19 levy, petroleum levy, import duties and the growth and sustainability levy in the 2024 budget. According to one respondent, “While an initial reduction of tax revenue may occur, the lowering of tax rates or abolishment of certain taxes could stimulate consumption and expenditure, ultimately enhancing overall tax revenue”.
The business community is emphasising the necessity of easing suffocating tax burdens on businesses. The top-five taxes suggested for review are the E-levy, COVID-19 levy, import levies, petroleum levy and growth and sustainability levy. During first-half of the year, several taxes including the National Fiscal Stabilisation Levy and E-levy underperformed – highlighting an urgent requirement for policy revision.
Power supply challenges
Yet another critical predicament encountered by businesses in 2023 is unpredictability of power supply. The report underscores a necessity for structural reforms within the power sector – to ensure a stable and reliable electricity supply, minimise losses and enhance overall efficiency. Additionally, it suggests a heightened emphasis on renewable energy sources in the energy mix to bolster the power sector, which is instrumental for sustainable industrialisation, infrastructure expansion and socioeconomic development.
Skilled labour shortage
A growing concern is the scarcity of skilled labor, with 19% of respondents citing it as a challenge; a substantial increase from the 9% reported in 2022. To tackle this issue, government is urged to prioritise policies which promote early economic recovery. This could help stem the tide of labour migration and encourage skilled individuals to return, thereby contributing to business and socioeconomic growth in a vibrant economy.
Review of flagship programme
The report additionally brings attention to the Free Senior High School (SHS) programme as a pivotal policy that has augmented secondary school enrollment and is preparing an educated workforce for the future. Nevertheless, the challenge of funding has placed a strain on government’s resources. As a solution, the report suggests the policy be reconsidered to enable parents with financial capacity to contribute in funding SHS education, while ensuring that needy students can continue to access the programme for free.
