22nd March, 2020
Hon Paula Gopee-Scoon
Minister of Trade and Industry
Dear Hon. Minister,
AMCHAM T&T compliments the GORTT for the whole of Government's approach to attempting to “flatten the curve” by promoting and enforcing social distancing through a range of measures. As difficult as these may be, we agree that the best available science shows that this is the only effective way to halt the spread of the virus.
The Economic fallout of this is already severe. However, this will be much worse if the virus spreads exponentially in the population, as we see in other economies.
The world and the global economy have changed forever. We must therefore adapt.
The main objective of the Government now has to be to build and maintain confidence.
As such, following decisive action around social distancing, in the short-term what is required is a targeted but robust economic programme designed to mitigate the short-term economic fallout. As such, we have listed some recommendations hereunder.
While this is not a time for long diatribes, we are compelled to point out that short-term measures will at best, only be effective in providing the room to stabilize the economy.
We acknowledge that these are short-term suggestions that will put a strain on the treasury. Consequently, we are cognizant of the fact that revenue generating measures need to be developed in phase two. We accept that all will have to share in the burden of recovery, including the business community.
Recovery is going to depend on close and constant collaboration among Government, civil society, labour and business. The most effective way to ease the ‘pain’ quickly is to have collective buy-in. Let’s do this together.
Recovery, will also require the Government to use this opportunity to significantly improve the ease of doing business, primarily through the adoption of digital technology in the government services. We will also need to radically re-engineer the education system in time for the 2020-2021 academic year.
We appreciate that the next week is critical in the stabilization phase. Once there is some confidence that measures around this have been put into place, the country needs to start looking at recovery and how we may best position ourselves to respond, mitigate and even benefit from the changes in global value and supply chains. Therefore, we suggest the establishment of a private sector team to work with the designated members of the Cabinet to develop on these initiatives.
1. Waiver of Green Fund and Business Levy through September 2020.
2. Corporation tax payment deferral to end Q3 to allow for taxes to be paid on actual amounts due as opposed to last year’s sales figures. This will help businesses substantially manage their cash flow.
3. Adaptation of already-announced unemployment payments to become wage support – 75% Government / 25% business for workers from week three once businesses are willing to keep people employed with no more than a maximum of 20% wage reduction. With this, businesses may seek to utilise this time for training or experiment on new products or services.
4. NIS benefits to kick in after week two for sick leave.
5. Defer VAT Payments through June 2020.
6. Grants for businesses employing fewer than 20 people.
7. Pay outstanding VAT refunds in full (minus interest owed).
8. Pay outstanding trade bills.
9. Any person or business applying for benefits must have a BIR number. Where individuals seek to benefit from wage support, they should be asked to identify their employer and that employer should either have or be made to register for a BIR number (but the latter should not prevent the individual from accessing the benefit). Government should consider waiving penalties on taxes and use this opportunity to have more people and businesses come into the tax net moving forward.
10. Increase taxes on “luxury” imported items in an attempt to conserve foreign exchange. However, these should not be across the board taxes on imported items as broad taxes will likely affect everyone negatively and result in price increases for ‘every-day’ items therefore higher inflation.
11. Grants for teachers to pay Internet service charges once they show evidence of teaching classes online (not extra lessons).
12. Grants for anyone with access to land to either boost production or begin cultivation of crops that will be ready to harvest within 12 months. Priority should be given to registered farmers in the first instance.
13. Co-financing of labour in the agricultural sector to compliment grants identified earlier and provide some opportunity for people who may have lost their jobs.
14. Waiver on stamp duty for loans through December 2020.
15. Waiver on penalties and interest on stamp duty currently owed but not yet paid through July 2020.
16. Waiver of penalties and interests for current tax payments for:
(A) final corporation tax for income year 2019 due on April 30, 2020, until June, 2020
(B) quarterly corporation tax, Business levy and Green Fund liabilities due on March 31st, 2020, until June, 2020
(C) PAYE, Health Surcharge and National Insurance due on the 15th of April and each succeeding month until June, 2020.
(D) Value Added Tax due on the 25th April and each succeeding month until June, 2020.
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