Businesses want taxes reduced
Businesses want the government to reduce the corporate tax rate and custom duties to help them sail through the challenges.
The Africa Trade Barometer Research conducted by the Standard Bank Group also discovered that companies found taxes on import and export firms to be high, thereby contributing to the perception that foreign trading was difficult.
The second edition of the reseach noted that businesses also expressed low level of confidence in doing business in the country.
It said the lack of confidence in the economy emanated from the rising prices of goods and services and the depreciation of the cedi.
The research was instituted six months ago to offer a comparative view of the enablers and challenges to trade facilitation across 10 key African markets further revealed that the slump in business confidence was driven by the perceptions around the economy.
The report identified firms that believed that the economy was stable and also more optimistic, while those who perceived the economy to be in a poor state were less optimistic.
It further revealed that most industries are recovering from the effects of the pandemic and believe that turnover will increase, however there remains some concern about the long-term impact of the regulations imposed at the time of the pandemic and the aftermath of COVID-19, according to the Africa Trade Barometer report.
The report is one of the most comprehensive research on the state of trade on the African continent as experienced on the ground by real African businesses.
Qualitative and quantitative intelligence was gathered from 2,554 firms during August and September 2022 for the second issue. The interviewee companies represented small, big and corporate businesses across all 10 economies the study covered.
The intelligence is further enriched by third party sources including the World Bank, International Trade Centre, and the central banks of the initial 10 focus markets.
The Africa Trade Barometer also revealed that firms’ perception of government’s support of trade was also significantly lower.
The perception of government’s support of trade dipped from 51 points in May last year to 45 points in November last year.
However, the report further stated that among big business and corporates, the perception was that the government was somewhat supportive.
The firms would like the government to provide some relief on business tax and lower customs duties. Beginning January this year, the government reversed the 30 per cent discount it had offered on benchmark rates used in valuing goods at the country’s ports.
This translates into higher customs duties and levies on imports at the port. High import/export tax rates contributes to the belief that foreign trading is difficult, the barometer found.
However, the ports continue to impress and deliver a world-class solution, and this is evident in the upward trend in terms of quality and the resulting less severe impact of the port infrastructure on business.
The Africa Trade Barometer is aimed at being an important tool that enables businesses to identify, unlock opportunity and drive growth across the continent.
The Africa Trade Barometer is aimed at providing a source of reliable data and insights on African markets and economies for businesses and entrepreneurs as well as business people, students, governments, NGOs and investors considering the continent.