The Employers Consultative Association (ECA) says given prevailing harsh economic realities, the budget was fairly balanced, with a mix of austerity measures and incentives. The association said government must therefore be commended for achieving a reduction in the budget deficit.
However, the ECA said it remains concerned about the relative impact new taxes would have on the cost of doing business. Specifically, the base corporation tax going up from 25 percent to 30 percent, the new 35 percent tax on commercial banks, a tax on used tyres and imported vehicles as well as increases in the retail price of super and diesel fuel.
“With an already difficult economic environment and limited access to foreign exchange for business transactions, we must not lose sight of the fact that a financially profitable private sector is generally acknowledged as an engine of growth for most economies around the world,” the ECA said in a release.
Notwithstanding this, the ECA was encouraged by proposed support measures for motivating and encouraging greater levels of entrepreneurial activities, small business development and export promotion. This can lead, it said, to the retention of jobs and creation of new jobs which influences wages and ultimately the standard of living of citizens.
Regarding the intended increase in government revenue from increased taxes, the ECA cautioned that achieving this requires commensurate improvements in tax collection and enforcement mechanisms. The association said it is optimistic the Revenue Authority would therefore be fast tracked to ensure an appropriate infrastructure is in place to widen the tax base.