Local and small businesses must be given more tax incentives, at least for the first five years of the firms commencing operations, an economic advisor with the United Nations Development Programme (UNDP) in Ghana, Frederick Mugisha, has said.
Dr Mugisha said there is a need for the government to provide incentives for companies in order to transform and protect businesses in Ghana.
In addition to giving tax exemptions to foreign businesses to encourage foreign direct investment (FDI), local firms should also be supported and nurtured to grow, he told The Finder Online. He said that when businesses come in for registration, the government must provide the needed support to help them grow.
“Create incentives around businesses which are small and large when they register. In five years’ time, the tax would be more than you expected,” Mugisha said.
He argued that businesses, especially smaller ones, must be taught to understand the importance of record keeping. He added: “Small businesses do not appreciate why it is important to keep records. They have to be taught so they can make a case when things go bad or right.”
Mugisha said the UNDP is willing to work with the government to transform tax holidays for the benefit of businesses and the economy at large.
Speaking of how strategic thinking could help businesses grow, he said that when businesses come for registration, they should not be left with only a piece of paper showing they had registered and ending all conversations.
Rather, Mugisha urged the government to treat businesses as “new babies” and “spoon-feed” them with good policies and ideas that could help them stand the test of time.
He said there is a need for the government to help businesses understand the strength of marketing as part of the process of formalisation, to help them expand and prevent early doubt in the progress stage.
Dr Mugisha urged the government and the private sector to see the process of formalising businesses as a core element that will assist progress and productivity in Ghana.