Wholesalers in the Fast Moving Consumer Goods (FMCG) had indicated that the introduction of the 3 per cent value added tax (VAT) flat rate scheme recently by government has been a disincentive to their businesses.
According to them, “It is difficult to charge the 3 per cent VAT flat rate at every stage of the value chain. This is counterproductive and the result of this phenomenon could be that government will record high VAT revenues whilst depleting the working capital of businesses.”
The sentiments were captured in a new report compiled by KPMG from a survey it took on some 35 business leaders scattered across various sectors of the economy.
Reacting to what challenges they were faced with in the business environment and climate, the respondents mentioned access to financing, reduction in the cost of clearing goods, as well as the cost and quality of utility services.
Key among these was the cost of funding and the stability of the Ghana Cedi.
They also commented on possible initiatives government could introduce in the 2020 budget to create a more conducive business environment, and advised government to ensure the stability of the cedi to control in the 2020 budget.
“It will be prudent for government to regulate its expenditure pattern especially as the country approaches elections next year. Government’s ability to control its expenditure, among others, will be key in stabilizing the cedi,” they said.
The latest report seeks to provide an analysis of the perception of the business community relative to the provisions of the budget as presented by the Finance Minister in the 2019 budget statement. The results also serve as pointers for government in their preparation of the 2020 budget.
The KPMG pre-budget survey has become a useful tool in gauging the level of business confidence in the country. And this year’s survey came at a time when many firms, especially financial institutions, were adjusting to economic and regulatory pressures, global macro-economic uncertainties and technological disruptions.
KPMG highlighted, “We expect that government’s planned interventions and infrastructural investments will foster a conducive environment for businesses to thrive.”
The survey was taken in August and September this year on 35 business leaders from various sectors of the economy. Such sectors included construction, financial services, hospitality, manufacturing, mining, oil & gas, pharmaceuticals, agribusiness, retail, transport and logistics, technology, consulting and other businesses.
Companies surveyed comprised multinational, local, and small to medium sized enterprises.