KPMG has released its 2022 pre-budget survey report ahead of the budget presentation next week.
The objective of the report was to solicit for views from business leaders across industries on the impact of existing policies on their businesses and to provide relevant feedback to the government through the Ministry of Finance on key insights to be considered for its subsequent budget cycles.
The report is structured into three thematic areas namely; (1) the global megatrends that are shaping governmental policies; (2) survey results & findings and key insights for consideration by government; and (3) appendices supporting the survey results.
The key findings that were obtained from the survey were on the Complexity of tax laws where most respondents indicated that local tax laws are complex.
On Fiscal measures the majority of respondents indicated that fiscal measures introduced both prior to COVID-19 and after COVID-19 had minimal impacts on their businesses.
Respondents also indicated that the three (3) major fiscal measures that should be prioritised by government in the 2022 budget are (1) reducing the 5% Financial Sector Recovery Levy, (2) Restoring NHIL/ GETFund input claim, and (3) Restoring the use of turnover thresholds for qualification to apply 3% VAT.
On factors affecting business growth and profitability the respondents also indicated that digital infrastructure and services and other factors such as cost of funding, availability of forex, infrastructure and stability of the cedi played significant roles on their business growth and profitability and as such need critical attention.
On key stay awake issues for businesses respondents suggested that government should pay critical attention to the depreciation of the Cedi, high business operational costs, high borrowing costs, high rate of taxes, increased government borrowing among others.
On the issue of the stage of business recovery, most respondents indicated that their businesses are at the resilience stage of responding to the COVID-19 crisis. Businesses have absorbed and adapted to the changing environment.
This implies that most businesses are taking stock of the crises (health and economic) and doing anything and everything possible to stay in business.
According to the report, the Ghanaians economy, continues to respond to the impacts and shocks from COVID-19, which threatened the consistent gains made by government towards achieving its 2030 Agenda.
It said provisional first quarter GDP estimates released by the Ghana Statistical Service (GSS) indicate that overall growth rate of 2021 is estimated at 3.1% compared to the 2020 provisional outturn of 0.4%.
Over the past few years, KPMG conducts a pre-budget survey before the national budget is issued by government. The purpose of this is to obtain feedback from the business community on the effectiveness of government’s policies and also to solicit public expectations for the next budget cycle.
This year’s pre-budget survey report has been prepared in line with KPMG’s Global Mega Trends guiding global economies and the trends include key factors such as “Demographics, Rise of the Individual, Enabling Technology, Economic Interconnectedness, Public Debt, Economic Power Shift, Climate Change, Resources stress and Urbanization”.
The report comes at a time when the economy is rebounding and a myriad of macroeconomic policies have been rolled out to curb the impact of the pandemic on individuals and businesses. Key among these policies is the implementation of the Ghana CARES “Obaatanpa” programme.
“There is, however, growing unease about the country’s debt levels and the expectation that the public and private sectors find new and better ways of collaborating to improve revenue mobilisation, reduce dependence on debt to fund public services, and catalyse job creation,” the report said.
In October 2021, KPMG surveyed 100 business leaders and obtained responses from 64 of these businesses drawn from the Ghanaian business community across 23 sectors for their perceptions of the business environment and the fiscal regimes that affect their operations. The sectors included Financial
Services, Mining, Oil & Gas, Consumer Goods, Industrial & Market, and other businesses including multinationals, local companies, and small to medium-sized enterprises. The results from the survey indicate that some of the macroeconomic policies have been effective although a lot more of such was expected by the business community. We hope the insights from the survey will help Government in their deliberations and provide valuable contributions in the lead-up to the 2022 Budget presentation.