The Youth Economic Dialogue (YED), a non governmental organization is calling on government to give tax reliefs to small and medium scale enterprises in the country.
In a statement released Thursday, YED said SMEs could be the engine of growth if given the right environment to operate.
Below is the statement
Youth Government should offer tax holiday for start ups Small and medium sized enterprises (SMEs) will leapfrog Ghana’s economic growth and development if given the right environment to operate. SMEs are a fundamental part of the economic fabric in developing countries, and they play a crucial role in furthering growth, innovation and prosperity.
However, SME’s experience restrictions when it comes to accessing capital that is required to grow and expand their businesses. Nearly half of all SME’s in Ghana rate access to finance as a major constraint.
The recent comment by the President of Ghana, calling on Ghana Commercial Bank to design innovative financial products to help the private sector, particularly the youth, in their start-up businesses, is welcoming as is the Asantehene Otumfuo Osei Tutu’s address on the importance for Government to focus on creating an enabling environment by empowering SME’s instead of focusing on job creation. Access to finance is not only the obstacle faced by our emerging entrepreneurs, it is important that policy formulators and all relevant agencies map out strategies to eliminate factors that hinder the growth of MSMEs. We wish to make the following contribution to this ongoing discussion:
According to the latest data from the World Bank’s report, doing business 2012, Ghana ranked 104 out of the 184 economies surveyed in the ease to start a business. Starting a business in Ghana requires 7 procedures, takes 12 days, costs 17.3% of income per capita and requires paid-in minimum capital of 5.5% of income per capita. We urge our policy makers and Government to streamline procedures to create a one-stop shop for business registration. As Ghanaian youth, we require business registration procedures which are simpler and faster through the use of technology and reducing the number of days to start a business from 12 days to 4 days.
Government should create incentives for aspiring entrepreneurs to start and formalize their businesses by offering discounted business registration fees and a 5-year tax holiday for newly registered MSMEs including all local government rates and taxes for business owners below the age of 40.
This would help widen the tax network of the country, as such MSMEs will be encouraged to register their businesses.
Provide Specific industries like the Manufacturing, Agribusiness, E-commerce with special incentives as such businesses are capital intensive and it’s sometimes frustrating getting the initial funding.
Government, through the support of the private sector, should put up Business incubators in major cities for start-ups and make funding available for their acceleration. South Africa and Kenya is doing very well in this stead and Ghana’s government can adopt such initiatives.
YED is ready to engage with government and any other body with interest in MSME development to design Enterprise Development programs and its implementation.
Kate Nkansa Dwamena Nana Yaw Adutwum Harold Boateng