Chief Executive Officer of Beige Capital, Mike Nyinaku has asked government to work towards creating simple and transparent tax systems that allow small firms to contribute towards tax revenues.
He said tax policies should always aim for simplicity because that makes it easier for small firms to pay taxes.
He said the talk about Small and Medium Enterprises (SMEs) being significant to economic growth would only mean something if opportunities are created for them to grow into multinational companies and or “Monster” Corporations.
Not denying the fact that starting small is the best thing, he noted, that remaining small is not the dream of any businessman, adding, growing the business is better in the long term.
“When a business is big you have a reasonable assurance that with prudent management it can last for generations and the country and continents would benefit for generations”.
Speaking at a forum held by the Association of Chartered Certified Accountants (ACCA) in Kampala, Uganda, Mr Nyinaku indicated that SMEs would “only give us sustenance but monster companies will guarantee us a step in growth.”
“It should be our aim to grow our businesses to higher heights. I am a firm believer in the concept small is cute but in today’s world cute is no longer secure enough…big is the way to go”, he continued.
According to Mr Nyinaku, the impact made by SMEs on economies is enormous but these values and influences are not felt due to the inadequate support given by respective governments.
He said that even though Africa has seen a continuous rise in the quantum of Foreign Direct Investments, most of the investors complain that they have difficulty finding local partners with capacity suitable enough to partner them.
Excessive tax burdens and complicated compliance procedures, according to Mr Nyinaku, can stifle the Small and Medium Enterprise (SME) sector and prevent it from generating employment, wealth or in more extreme cases, discourage participation in the formal economy.
Another area where policies impact significantly on SMEs, he noted, was business regulations and that research has shown that countries with burdensome regulations have larger informal sectors, higher unemployment rates and slower economic growth.
He however advised that small companies should not be in a hurry to go international because barriers including cultural differences, difficulties gaining market information may hinder growth if the necessary preparations are not made.
Credit: Myjoyonline