The United Nations Development Programme (UNDP) and the auditing and accounting firm KPMG recently conducted a survey to learn what people's expectations are for Ghana's 2024 budget statement from both individuals and businesses. According to the survey, companies want the government to review or eliminate a number of taxes, such as the growth and sustainability levy, the petroleum levy, the E-levy, and the COVID-19 levy.
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The businesses argue that removing or reducing these taxes, although initially resulting in reduced tax revenue, would potentially stimulate consumption and expenditure, ultimately benefiting tax revenue in the long run. The survey, which included 133 businesses from various sectors of the economy, highlighted the adverse impact of the current tax environment on their operations. Of the respondents, 76% identified the E-levy as the top tax that should be scrapped or reviewed. The E-levy, introduced in May 2022, imposed a 1.5% charge on electronic and mobile money transactions exceeding ¢100 per day. In January 2023, the government reduced the rate to 1%.
Similarly, 68% of the respondents called for a review of the COVID-19 levy, while 62% expressed concerns about the petroleum levy. Additionally, over 51% identified the growth and sustainability levy as an area where modifications could potentially alleviate the burdens faced by businesses. It is worth mentioning that the government has emphasized the relevance of the COVID-19 levy, attributing it to the lingering effects of the pandemic and global supply chain disruptions.
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To manage the fiscal impact of revising these taxes, businesses advised the government to focus on widening the tax net, rationalizing expenditure, and reviewing flagship programs such as the free Senior High School (SHS) program. These measures can help alleviate economic hardships for Ghanaians while consolidating the positive gains made so far.
As the 2024 budget is set to be presented to Parliament on November 15, businesses and individuals have provided numerous recommendations on how the government can address economic challenges in Ghana. The survey conducted by KPMG and the UNDP serves as a valuable source of feedback, reflecting the sentiments of businesses in various sectors of the economy.
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Ghana's economic landscape has seen some stability in recent months, with improvements in inflation rates and fiscal indicators. The government's economic policies, as outlined in the upcoming budget statement, will be pivotal in addressing the concerns raised by businesses and individuals, and in ensuring sustainable economic growth and development.
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