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Petty challenges encountered by Start-ups in Ghana | Emma. Bimpong

A business refers to the general efforts and activities of individuals to produce and sell goods and services for profit. Businesses range from a sole proprietorship to an international corporation. The main objective of a business is to make profit and create wealth which, often faced with various challenges. Businesses encounter various obstacles of which some are inevitable whiles the others can be managed with the right approach.

A business objective explains in detail what steps an entrepreneur plans to take in order to achieve a specific aim. Aims and goals in doing business are more general. Objectives in doing business can be viewed in the forms such as economic where profit is the sole objective, social in which the objective is to care for societal benefits, ensuring for the wellbeing of employees mostly described as human objectives of a business, also national and global objectives as well.

This article explores the various challenges or obstacles faced by businesses mostly in Ghana and ways to tackle these challenges, buttressing the issueof taxation as the central focus.

Business obstacles are current or long term challenges faced by businesses and this can prevent a business from executing its strategy towards the attainment of a desired goal. These obstacles can be viewed in two main phases, these are namely; internal and external environment. Internal obstacles to businesses are mostly found within the organization or the businesses.

This mostly includes employees and their managers with respect to their level of experience and attitude towards work, internal politics and conflicts among management, the money and resources available, the company culture which describes the company’s values, attitude and priorities. With these challenges the managers along with the employers have optimum control over them. The contrast of this is the external obstacles of the businesses environment. The external challenges or obstacle of businesses towards the attainment of the set objectives include; political, economic, social, technology and legal obstacles.

Also issues such as the economic state of the economy, competition from other businesses, politics and policies of the government not forgetting customers and suppliers equally affects business development. With these challenges, the manager has little or no control over. The best to do is to adjust to the changing circumstances. One prevalent stumbling block in doing business is the issue of taxation.

Moving forward, taxes are involuntary fees levied on individuals or corporations and enforced by a government entity with laws whether local, regional or national in order to finance government activities or expenditure. Tax is a key variable in government fiscal policy. In the OECD classification, the term taxes are confined to a compulsory, unrequited payment to general government. In economics, taxes fall on whoever pays the burden of the tax, whether this is the entity being taxed, such as a business, or the end consumers of the business’s goods.

Taxes on various businesses are inevitable unless exempted. In Ghana, taxes are supervised and collected by the Ghana Revenue Authority. The Authority is headed by the Commissioner- General, with support from three commissioners in charge of the following divisions, namely; the Domestic Tax revenue, the customs and the support service divisions. Tax collection is based on the size of the business.

Large taxpayers are described as the large and complex organizations and businesses whose annual turnover is over GH₵5 million. These businesses are managed by the Large Taxpayer office (LTO). Medium taxpayers are those businesses whose annual turner falls between GH₵5 million and GH₵90,000.Also, small taxpayers which includes the micro businesses with annual turnover below GH₵90,000. There are fifty (50) Small Taxpayer Offices (STOs) spread across the country that cater for the special needs of these businesses to ensure that they comply with tax laws at minimal cost.

Taxes in Ghana have various components which affect businesses directly or indirectly. These components of tax include; income and property tax, domestic goods and services, international trade tax taxes and finally the popularized value added tax. With these components of taxes, some touch directly on businesses.

With respect to income tax, charged on a person’s income from employment, businesses and investment. Persons such as employees, self-employed, persons in partnership, Shareholdersanddirectorsofcompaniesandtrusteesandbeneficiariesof a trust are all charged tax on income earned. Taxes pose a major challenge to business prosperity. Even though Government taxes reduce the capital funds available to make investments and build a greater and more productive structure and also having the tendency of deterring potential entrepreneurs from starting up their dream businesses.

The big question, is how businesses can overcome the obstacles?  To tackle this challenge, Entrepreneurs should be creative and innovative to produce  good products and services that will create more sales and revenue. Also, there should be prompt payment of taxes to prevent further charges and should be able to engage the government to reduce taxes that stifle innovation and creativity. Most importantly, businesses should seek proper tax education and training from the appropriate authorities and expertise.

As a matter of emphasis, a business can also use the SWOT Analysis, that is; identifying strength, overcoming weakness, taking Opportunities and eliminating threats.

To sum up, the financial rewards that come from being successful in business are of course important to many entrepreneurs, and are key factors in motivating them to work hard and take tremendous risks. Business threats are inevitable but they can be overcome when handed properly.

 

 

Emmanuel Bimpong

Volunteer

ILAPI

 

 

Picture credit: citifmonline


admin
2020-07-31 19:48:48
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Source: ILAPI