COVID 19:

IMPLICATIONS FOR
BUISNESS
STRATEGY FOR SURVIVAL
AND CONTINUITY
 Road Map

Covid 19 in Perspective
What Now?; What Next?
Government Response
Tax Issues
Financial Reporting
4 Strategies for Business Recovery
COVID 19 IN PERSPECTIVE

 The coronavirus 2019 (COVID‑19) pandemic is affecting economic

and financial markets, and virtually all industries are facing
challenges associated with the economic conditions resulting from
efforts to address it.
 The efforts to address it include:
 Regulatory changes
 Organisational mandates
 Changes in consumer behaviour – Social distancing
 As the pandemic increases in both magnitude and duration, entities
are experiencing conditions often associated with a general
economic downturn.
COVID 19 IN PERSPECTIVE

Obvious factors indicating a downturn include:

 financial market volatility and erosion
 deteriorating credit and liquidity concerns
 increases in government intervention
 increasing unemployment, layoffs and furloughs
 broad declines in consumer discretionary spending
 increasing inventory levels and reductions in production
 business restructuring activities
The continuation of these circumstances could result in an
even broader economic downturn which could have a
prolonged negative impact on a business and its financial
results.
 COVID 19 IN PERSPECTIVE

 The Important Issues:

 GOING CONCERN
 JOB SECURITY

 Business owners are beginning to consider whether, in their specific

circumstances, their businesses have the ability to continue as a going
concern (continue to survive).
 Employees are assessing the likelihood of losing their jobs, suffering pay
cuts, etc.
 WHAT NOW?; WHAT NEXT?

 To answer ‘what now’, business owners are asking ‘what next’

 COVID-19 has already spurred companies to embrace their future far quicker
than they would have organically – from agile working and digitalization, to
automation and investment in new ways of doing business.
 If you know where you are going, actions to respond to the crisis today can set you
up for the years ahead.

 Of course, answering ‘what’s next’ for your business means knowing what’s
next for the world; what may have been right for your business BC (Before-
COVID) may not be right in the ‘new reality’ that we will soon face.
 Crystal-balling a post COVID-19 world requires divination of two key questions:
when will it happen; and what will it look like? 
 ‘What’s next’ will always be uncertain, but two universal factors will point the
way to the speed and direction of recovery for any given Country and Business.
 The Spread and Fatality of the Virus
 Political Response
 GOVERNMENT
INTERVENTIONS

As business leaders begin to address the needs of their

operations, they face a complex matrix of government
programs, differences in approach, scope and scale in each
jurisdiction.
There are many government aid packages being offered globally
to mitigate the economic impact of the COVID-19 pandemic.
 These range from automatic tax changes, state-insurance
systems, and direct aid payments or loans to preserve jobs and
avoid business failures.
 Business enterprises will need to balance their own fiscal
outlook against the needs of their communities, the intent of
the relief, and any associated reputational issues when deciding
to accept significant government assistance.
 GOVERNMENT
INTERVENTIONS

Interventions in Ghana so far….

 The Central Bank of Ghana has taken measures to mitigate the
negative impact of the outbreak, including cutting interest rates and
reserve requirements, and decreasing banks’ conservation buffers. 
 Cut of key interest rate to 8-year low from 16% to 14.5%;
 Lowering reserve requirements for lenders from 10% to 8% in order to provide
liquidity support to critical sectors;
 Decrease in the banks’ conservation buffer from 3% to 1.5%, which cuts the capital-
adequacy ratio from 13% to 11.5%.
 Workers have been asked to work from home whenever possible.
 Closure of borders and travel restrictions
 Closure of schools, and encouragement of the use of virtual
classrooms and platforms for education
 Restrictions of religious, social and political activities requiring
gathering of persons beyond certain thresholds.
 GOVERNMENT
INTERVENTIONS

Interventions in Ghana so far….

 Asked the IMF for a rapid disbursement of a credit facility to help
the country face the negative economic impact caused by the
Covid-19 outbreak.
 The Bank of Ghana has decided to decrease the cost of fund
transfers through mobile money, in order to avoid a low in
transactions.
 No mobile money transactions below GH100 (USD18) will be
charged by service suppliers for three months – April, May, June.
 Cost of utilities – water and electricity - borne by the government
for three months – April, May, June.
 Soft loans to businesses through the NBSSI
 TAX ISSUES

The outbreak poses many challenges but for taxpayers in

Ghana, the question is: what are the tax implications
associated with this pandemic?
 The outbreak is a non-adjusting event as at 31 December 2019
since little knowledge was known of the virus. Therefore, the
outbreak posed minimal tax consequences as at 31 December
2019.
 The reason being that, adverse adjustments such as increase in
provisions including bad debts and impairments (which are
treated as non-allowable expenses under our current Income Tax
Act, 2015 (Act 896)) that may arise as a result of the pandemic
may have no effect on the tax liability. 
 TAX ISSUES

The Revenue Administration Act, 2016 (Act 915) provides for taxpayers to apply for
extension of time (two months more) to file and pay tax. The Commissioner-General
may grant the approval if good cause is shown. It, therefore, suffices to say that, our tax
laws have made provisions for taxpayers' inability to file on time in event of
uncertainties. 
 Should the outbreak persist at the end of the two (2) months extension period, what
avenues may be available? 
 By the current tax law, no further extension can be granted by the Commissioner-
General for the submission of tax returns.  
 Based on our current tax laws, failure to file a return on the due date will result in penal
charges.
 Taxpayers are currently able to pay taxes via wire transfer. Therefore, a lock down will
generally not impact the payment of any tax due
 The due date for filing annual corporate income tax and individual income tax returns
has been extended from four months to six months after the end of the tax period.
 TAX ISSUES

The Ghana tax system taxes individuals on residency basis. As

such, a non-resident becomes resident for tax purposes if
present in the country for an aggregate period of one hundred
and eighty-three (183) days or more in any twelve-month
period that commences or ends during the year of assessment.
 This law does not take into consideration a non-resident who has overstayed and
thus attained residency status as a result of the pandemic.
 Therefore, where there is no legislative instrument that amends this provision,
instead of the individual being subject to tax in Ghana at the non-resident rate of
25%, that individual will be subject to tax at the graduated tax rate with 30% being
the highest marginal rate on annual taxable income exceeding GHS240,000.
 FINANCIAL REPORTING

 Under the new Companies Act of Ghana, Act 992 of 2019, the
accepted standard for preparing financial statements are either the
IFRS or the IFRS for SME’s issued by the IASB.
 In response to COVID 19, several considerations are becoming apparent to
preparers of financial statements:
 Material judgements and uncertainties
 Going concern
 Events after the reporting period
 Impairment of financial and non-financial assets
 Liquidity Management
 Lease contracts – treatment of lease concessions
 Accounting for Government Assistance
 Share-based payments
 Accounting for tax reliefs and credits, etc.
 STRATEGIES FOR
RECOVERY

 Business owners must take proactive steps now to put their

businesses in a more secure position to stay strong and recover faster
once the crisis subsides.
 I now discuss a few strategies that can help businesses around this.
 STRATEGIES FOR
RECOVERY

 Think about how coronavirus affects customers

 https://www.entrepreneur.com/article/347557
THANK YOU