Government has put several measures in place to address the economic challenges currently being encountered by residents and businesses as a result of Covid-19.
Prime Minister Roosevelt Skerrit announced the package during an address to the nation on Sunday night, as part of additional measures that are being taken to help cushion the effects of the pandemic on its citizens.
“Very early on, with the assistance of the Central Bank, we engaged with financial institutions to provide relief to customers from payment of loans, mortgages and credit card debts,” the Prime Minister said. “In most instances, customers have the option to defer payments for a period of up to 6 months and I am advised that many people are taking advantage of that option.”
He said the government also extended the deadline for the filing of personal and corporate income tax returns, and the payment of income tax was extended by three months for companies with financial years ending in January 2020 to June 2020.
The prime minister said consideration was also given to waiving penalties for businesses that enter into payment plans within 6 months of the new payment deadline, for amounts due in respect of the same tax periods.
The measures also contain relief for heads of families and single persons who are currently no longer employed. They will receive income support in the amount of $600 and $400 respectively for the period April 2020 to June 2020, in the first instance.
The government is providing an amount of EC$15.7 million to help the affected employees and self-employed but, according to Skerrit, the Dominica Social Security [DSS]will distribute the funds “given the administrative capacity that is already in place.”
The DSS, he said, will provide the details of how to apply for these grants.
The government will also provide loans of up to $15,000 to micro and small enterprises at an interest rate of one percent. This money will be available to small businesses (including self-employed persons) such as manufacturers, bus drivers, barbers, hairdressers and people in the tourism sector, to bridge the funding gap created as a result of the pandemic,
“Access to these funds will be available from May 22, 2020. Payment of the first installment will be due six months after the receipt of the loan. This loan facility of $5.0 million, in the first instance, will be administered by the Aid Bank,” Prime Minister Skerrit revealed.
He said that as an expression of gratitude for the social responsibility displayed by a great majority of employers in this country, the government will grant a rebate to companies equivalent to an 8 percent reduction in the corporate income tax rate applied to their chargeable income, for income years ending December 31, 2019, and between January 1, 2020, and June 30, 2020.
“This income tax rate reduction from 25 percent to 17 percent of chargeable income will apply to companies which have signed agreements with the government committing to continue to employ at least 80 percent of their staffing compliment as at January 1, 2020, for a period of 12 months, from the date of the granting of the rebate. Revenue forgone by this measure is estimated at $7.68 million,” Skerrit explained.
The government will reduce to zero percent, the import duty, and the value-added tax which are now charged on such things as disinfectants, cleaning supplies, protective gears and face masks which will be implemented immediately for six months in the first instance and according to the prime minister, will cost the government an estimated $1.7 million in lost revenues,
“But we felt it urgent and necessary to help residents and businesses cushion the cost of the increased measures they have to take to ensure that proper hygiene is maintained,” the prime minister noted.
Skerrit presented the relief measures against what he portrayed as a defining revenue situation in the country. He said for the month of April 2020, collections from Personal Income Tax declined by 12 percent, Corporate Income Tax declined by 91 percent, Value Added Tax declined by 34 percent, Excise Tax 30 percent and Import duties by 19 percent.
“Similarly, as expected, we have seen a decline in CBI revenue,” the prime minister said but he didn’t give figures.
He said taxes collected by the Customs Division are estimated to decline by an average of 30% for the months of April to June 2020 while Inland Revenue Division is projected to fall short in revenue collection by an average of 20% for that same period.
“This must be viewed in the context of a country that is still recovering from the utter devastation caused by Hurricane Maria less than three years ago,” Skerrit remarked
Meantime, the prime minister reported, based on information received from the Dominica Association of Industry & Commerce (DAIC) and the government’s own assessment, DAIC members have retained their pre-COVID 19 Pandemic staff and 88 percent of the top largest private-sector employers have held on to their full complement of staff while the other 12 percent have released fifteen percent (or approximately 90 persons).
Skerrit believes that these employers should be commended highly for their stellar contribution to the well-being of their employees and families.
“They have agreed to hold on and partner with the government to ensure the social stability of the country in these very difficult and uncertain times,” he said.
According to the prime minister, the government has so far, spent almost 22 million dollars in direct costs in the response to the Covid-19 Pandemic.
The DSS again PM? This time to be used as the conduit? I would much rather receive my money through Nanthan money transfer.
Dear PM Skerrit, I reside in the US and really wish to send a financial contribution to Dominica but all banks are denying my transfer. I am wondering if you know anyone preferable from your office, that might be very skilled in transferring the money.
I don’t think that will be to much of a problem…
The main man has plenty experience.