Gov't unveils ambitious economic package to cushion businesses from COVID-19 impacts
Government has developed an economic response to the COVID-19 pandemic to support workers, stabilise businesses, ensure and promote opportunities for economic diversification.
Wilfred Mandlebe, Permanent Secretary in the Ministry of Finance and Development Planning said the response strategy has several interventions that will also reduce the country’s import bill.
“All the sectors are encouraged to introspect and identify products that can be produced locally so that the country can achieve self-sufficiency and economic diversification as the pandemic has exposed our heavy dependency and vulnerability,” said Mandlebe.
With the expenditure budget for relief package expected to gobble over five billion pula, government has already capitalised the pandemic relief fund to the tune of P2 billion. The authorities have further sent out begging bowls to the private sector, development partners, philanthropists and individuals, to support the fund.
“Any donation to the COVID-19 Relief Fund shall not qualify as deductible expenditure. The public is encouraged to donate in kind (to the fund) which is coordinated by the Disaster Office under the Office of the President,” said Mandlebe.
Some of the interventions, according to Mandlebe include wage subsidy of up to one billion pula, which assistance will be offered regardless of whether the business owes tax.
Mandlebe highlighted that to stabilise businesses further, government has established a loan guarantee scheme of one billion pula to be managed by BECI for loans of up to 25 million pula per borrower.
“Government has also developed guidelines targeting sectors that have been negatively affected by the Corona virus pandemic,” said Mandlebe.
He added that tax concessions worth one billion pula have also been drawn up.
He said the Botswana Unified Revenue Services will allow deferral of 75 percent of any two quarterly payments between March and September 2020, adding that the deferred payments are to be repaid from March 2021.
Mandlebe added that efforts to cushion business community also include reducing the VAT refunds period from 60 days to 21 days for businesses with turnover of over P250 million per annum and will be negotiated on a case-by-case basis.
“To the extent that Government commits to continue to pay VAT refunds and any outstanding amounts due to businesses during the period, it is expected that regular tax filing and repayments will continue to be done electronically.
“In the event companies are unable to access the e-service platforms for some reasons; companies will not be penalised for failing to comply,” said Mandlebe. Other packages include P40 million set aside to support SMEs affected by the COVID-19 with short-term financing of working capital requirements, mobile network operators to extend a range of retail and service outlets accepting mobile money. Government will also provide funding for strategic reserves and other essential costs such as grain reserves, water supply, emergency medical costs, psychosocial support which will include counselling services and burials.
