A recent survey jointly conducted by accounting firm KPMG and the United Nations Development Programme, has highlighted the profound impact of some taxes on the operations of businesses as the presentation of the 2024 budget approaches.
The study exposes the fiscal hurdles faced by enterprises and offers a range of recommendations to alleviate the tax-related burden.
The survey underscores the considerable concern around taxes such as the Electronic Transfer Levy (E-Levy) and the COVID-19 Levy, which have emerged as significant pain points for businesses, shedding light on how fiscal policies influence the everyday operations of corporate entities.
Businesses have expressed strong apprehensions regarding the current tax landscape, highlighting its adverse implications for their operations. They have identified specific tax areas that, in their view, require modifications to mitigate the challenges they are confronting.
Taxes identified by businesses for potential modification include the E-Levy, COVID-19 Levy, Import Tariffs, Petroleum Levy and the Growth and Sustainability Levy.
Businesses have recognized that while abolishing certain taxes or reducing tax rates may initially result in lower tax revenues, these measures are however likely to stimulate consumption and expenditure, ultimately leading to enhanced tax revenues.
In addition to tax-related matters, businesses underscore the need for continuous digitization and simplification of business registration and licensing processes to enhance efficiency and streamline business operations.
The survey also spotlights the pressing necessity to establish sustainable and affordable funding mechanisms for MSMEs. Businesses recommend expanding programs that incentivize banks to fund MSMEs through risk-sharing strategies.