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2024 budget: Businesses eye potential tax reductions and favourable inflation policies

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By Laary Watch


 Results from Ghana’s 2024 pre-budget survey show businesses look forward to the budget considering initiatives that review certain tax policies and reduce inflation to lessen economic impacts. 

The findings also call for the need to invest in advancing the Sustainable Development Goals (SDGs), particularly those relating to education, health, and economic prosperity to leave no one behind.

 The pre-budget survey results were released by KPMG and the United Nations Development Programme (UNDP) in Ghana.

 The survey solicited views from businesses across several industries on the impact of existing policies on their businesses and provided key recommendations to the Government through the Ministry of Finance to be considered in the upcoming budget and subsequent budget cycles.

The national budget remains a key policy document for the implementation of various policy reforms and other policy measures in the country.

“We hope the insights from the survey will help the Government in their deliberations and provide valuable contributions in the lead-up to the 2024 Budget”, Anthony Sarpong, Senior Partner at KPMG Ghana said.

Key highlights and recommendations from the pre-budget survey include the following:

Economic Factors: The findings reveal a high inflation rate and cedi depreciation as key economic factors significantly affecting business performance and profitability.

The results show about 5 in 10 businesses citing the negative impacts of these factors on the growth of their business. Other economic challenges cited by the respondents included rising interest rates, restricted access to financial resources, difficulties in retaining skilled labour, power supply constraints, and supply chain disruptions.

The respondents suggested the need for the 2024 national budget to consider initiatives that reduce corruption, inflation, and interest rates as well as improve the performance of the local currency and restore confidence in the economy.

Taxes: Respondents of the survey felt the current tax environment is adversely impacting their businesses. The top five taxes businesses want to be revised are the e-levy, COVID-19 levy, import levies, petroleum levy, and growth and sustainability levy.

The survey recommends broadening the tax base; rationalization of Government expenditures; and a comprehensive review of some of the Government’s flagship programmes such as the free Senior High School (SHS).

 Sustainable Development Goals (SDGs): The survey results show a growing demand for SDG-focused governance and resource allocation strategies, with about 8 in 10 respondents supporting Government incorporation of SDGs into the budget formulation.

 In the 2024 budget priorities, Quality Education, Good Health, and No Poverty are identified as the top three SDGs to be prioritized.

 “Evidence suggests that economic growth is an enabler for the SDGs in the short term and over time the SDG agenda itself becomes a catalyst for inclusive economic growth.

 UNDP will continue to work as part of the UN family in Ghana and with other development partners, to support SDG-aligned investment and financing by public and private sectors to advance SDG implementation to leave no one behind”, noted Angela Lusigi, UNDP Resident Representative in Ghana.

Growing Interest in Sustainability: The survey reveals an increasing recognition of the importance of integrating Environmental, Social and Governance (ESG) considerations in shaping public policies and resource allocation. 

In addition, businesses highlighted the importance of having dedicated funds for climate initiatives and call for accelerated actions to address environmental degradation, particularly in areas like illegal mining. 

Preferred Policies:  

In terms of policies, businesses want to see the 2024 Government budget prioritizing policies that promote local businesses and exports through industrialization, agriculture development, and infrastructure development.

The highlights of the findings from the pre-budget survey provide evidence for the 2024 budget to consider prioritizing policies that promote inclusive green growth and sustainable development.


 



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