Tax reform and economic uncertainty are the main source of concern for well over half the chief financial officers (CFOs) in the US, according to a survey by Grant Thornton.
More than 900 CFOs participated in the survey, 55 percent of which said that uncertainty in the US economy is a major concern that could impact their businesses’ growth in the next 12 months.
However, CFOs are particularly frustrated by the “dysfunction” in Congress over a bill to extend more than 50 popular tax provisions that expired at the end of 2014. Negotiations in Congress are ongoing and, according to Mel Schwarz, partner and director of tax legislative affairs at Grant Thornton’s Washington national tax office, in past years, negotiations over the tax extenders bill have dragged on into December.
However, 51 percent of companies that actually use the tax provisions are doing all their planning with the assumption that the extension will not occur, according to the survey.
Schwarz added in a news statement: “This is very troublesome and creates major headaches for US businesses. Lawmakers need to agree on at least a two-year retroactive extension of nearly all the provisions, with a one-year extension as an absolute fallback.”
The other main challenges to business growth cited in the survey include:
- The strong US dollar has reduced the value of revenues and earnings from overseas operations and has depressed revenue growth for US companies.
- Nearly half (44 percent) of CFOs say the most significant cybersecurity risks are those that are unknown, while 57 percent say it is the potential for undetected breaches that worries them the most.
- Mixed signals from the US Federal Reserve on whether or not it will raise interest rates at a policy meeting this September is also a major issue.
- Forty-five percent of CFOs say that increasing costs of compliance present the biggest challenge to growth.
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