• Saturday, March 02, 2024
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EY Africa tax conference takes closer look at entrepreneurship

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EY is set to host its 11th Annual Africa Tax Conference. The theme of this year’s conference will be around ‘Building a Better Working World in Africa.’

While many tax conferences focus on ways that taxpayers can better manage their tax obligations, this year EY will look closely at the challenges and the tremendous potential that can be realised if unemployment, and particularly youth unemployment, can be reduced considerably.

The EY Africa tax conference brings in EY tax leaders from close to 50 countries to meet and engage with business, government and revenue authorities across the African continent.

EY has recently launched a report, “Avoiding a lost generation – 10 key recommendations to support youth entrepreneurship across the G20.” The report, put together in collaboration with the G20 YEA, identifies and analyses the different youth unemployment issues faced by countries across the G20 and seeks to offer actionable recommendations, as well as providing examples of successful entrepreneurship schemes and policies already in place.

According to EY, youth unemployment remains high, at 16 percent across the G20 nations and far higher throughout Africa. Encouraging entrepreneurship is widely seen as one of the solutions to the problem, thanks to the jobs a vibrant entrepreneurial organisation can create.

Recent EY studies show that entrepreneur-led businesses will create more jobs than large corporates over the coming year – with 76 percent of entrepreneurs saying they will expand their workforces in 2014, compared to 31 percent of senior executives at large corporates. Jim Deiotte, EY’s Africa tax leader took note, at the recent American Chamber of Commerce (AmCham) Youth Summit that the South Africa National Development Plan contemplates that “90 percent of jobs will be created in small and expanding firms.”

On the conference, Deiotte said: “Yes, tax policy, effective planning and controversy management will be shared with and discussed amongst all participants. But this year’s conference will add that special focus on our role and that of business in growing a better working world in Africa.”

Deiotte further said: “We are not only seeing governments around the world ready and determined to help, but so too are businesses.” The AmCham Youth Summit is one example of an international organisation’s first phase contribution to the National Development Plan. Their programme brought together some of the largest corporations in the world to contribute time, capital and opportunities for local entrepreneurs in Africa in order to encourage greater levels of entrepreneurship.

“Youth unemployment is a persistent issue across the world and, despite improving economic conditions, it remains stubbornly high. This is not only a tragedy for the young people affected, but it is a huge wasted opportunity for governments across the globe,” according to Deiotte.

Keith Engel, EY’s Africa tax policy leader, particularly notes that the solution to the problem of encouraging entrepreneurial growth requires a multi-faceted approach. “Entrepreneurs need regulatory freedom, reduced costs of operations (possibly including tax), funding, training and a different cultural mindset. Government and the private sector can each provide only some of these remedies in isolation. Therefore, both Government and the private sector must work together if a comprehensive and meaningful solution is to be achieved,” Engel said.

The EY report includes analysis of schemes currently in place across the G20 and beyond to develop 10 key recommendations, these are: Create funding mechanisms, either government run or government backed, that make mentorship and financial education a condition of funding; Create strong relationships, and provide incentives, with venture capitalists, incubators and business angels to develop or create initiatives that enable alternative sources of capital; Sponsor start-up growth with low-cost funding for targeted groups; Create a new class of loan for small businesses and young entrepreneurial firms that offer targeted funding to meet expansion capital needs; Encourage investment in start-ups by offering tax benefits; Encourage top international talent by changing visa rules and offering funding support; Simplify and streamline tax administration to ease administrative burdens on young entrepreneurs; Create a positive narrative around entrepreneurship to help engage young people from an early age; Encourage and foster hubs, incubators, accelerators and networks to bring relevant talent together, and Create the foundation for a regional entrepreneurial ecosystem to flourish.

Iheanyi Nwachukwu