IEA calls for tax rewards to companies to boost employment

The Institute of Economic Affairs (IEA) is calling for tax rewards to companies as an incentive for employment generation in the country.

The Institute made the recommendation during a presentation of its Business Confidence Survey report Tuesday.

The report showed that the business environment had deteriorated in the middle of 2014 culminating in a worsening performance of businesses in parts of the country.

Some 93 companies surveyed by the Institute of Economic Affairs attributed the worsening performance of businesses to the crippling power crisis, high cost of credit, increases in taxes by government and adverse macroeconomic environment.

Jobs have also been affected as a result of deterioration in the business performance.

The survey indicated a net loss of employment with some 41.5% of companies in the non-financial sectors laying off workers.

IEA called for serious government intervention to address the problem of unemployment in the country.

The survey, conducted in November 2014, captured the concerns of the business players over the last six months of the same year.

Despite the downturn, the companies were optimistic business will improve in the following six months beginning 2015.

Presenting the report, Tuesday, Dr John Kwakye, a Senior Research Fellow at IEA said the maiden business confidence survey is part of measures to enhance public awareness and to generate informed debate on key challenges facing the country and how to address them.

Ninety-three (93) out of 100 registered companies sampled from three regions of Ghana- Greater Accra, Ashanti, and Western Regions- volunteered information on pertinent issues affecting the business sector.

The companies were picked from the Services, Agriculture and Industry sectors of the economy, Kwakye indicated.

Even though there was a general lull in business performance, the financial sectors of the economy performed better than the non-financial sectors of the economy.

Dr Kwakye hinted the financial sector may be riding on unusually high returns including an exceptionally high-interest rates and spreads.

The IEA as part of its recommendation called on government to provide reliefs to businesses; reduction in taxes and working assiduously in addressing the energy crisis.

The Institute also reiterated the need to ensure a stable macroeconomic environment to guarantee certainty in investment and business planning

“In this regard, sound public financial management is critical in creating a more conducive environment with respect to the cost of credit exchange rate and inflation,” he noted.

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