The island state of Vanuatu has announced a $52 million Economic Stimulus Package during this COVID-19 crisis.
As Governments around the world introduce measures to safeguard their economies which are gradually being weakened every day, the nation of Vanuatu, with a population of no more than 300,000 people is responding to its people through this hard times.
The Vanuatu Caretaker Prime Minister, Charlot Salwai said during the announcement he hopes the Government ” brings some comfort to many who are already suffering”
The Stimulus package is a coordinated response from the Government, the Reserve Bank of Vanuatu, development partners, and the private sector and it is designed to boost economic growth by a combination of fiscal and monetary policies.
The Vanuatu Government in its announcement the $52 million Stimulus Package stated the overall objective of introducing the Stimulus package is to ensure the Vanuatu people are safe, be able to keep their jobs and keep businesses open.
The Economical Stimulus Package announced will be released in stages supporting various key elements that the Vanuatu Government wishes to support.
DEFERRING OF A NUMBER OF TAXES & CHARGES
Raod Tax, Wok Permit Fees, Business License Fees, (except for commercial banks) Residential Permit Charges and Rent Tax are all covered in the stimulus package.
Vanuatu also announced business license reforms for turnover Tax from commercial banks 7% to 5% to support efficient banking and also encourage lower interest rates, fees and charges.
More fees and charges are yet to be announced under the stimulus package especially with revenue through the Vanuatu Government.
Reforms introduced through the Stimulus Package have been backdated to January 2020 and will see businesses who have paid for Taxes, fees and charges get refunds on cost.
EMPLOYMENT & BUSINESS SUBSIDIES
The Stimulus package also supports employers with Employment Stabilization Payments and will look to reimburse employers with $300 per employee on their payroll for up to four months.
Employers will also receive 15% of the amount reimbursed for wages under the Employment Stabilization Payments and is paid directly to them as support cash flow.
Employers will also receive a payment of 15 per cent of the amount they are reimbursed for wages under this payment as an added incentive to keep their staff employed;
Additionally, small to medium businesses with a turnover of less than $2 million will have access to an additional payment equal to the value of the fees of a full year business license.
These are direct payments in addition to the business license cancellation or refund mentioned as part of the revenue initiatives. Again, this will provide much-needed cash flow to struggling businesses.
The Government will also support the productive sector, in particular, copra, kava cocoa and other commodities that provide income to the citizens and in a similar manner, the Vanuatu Government has also committed to providing assistance to the transport sector to facilitate market to major centres such as Port Vila.
In addition, the Vanuatu Government budget for this year is just above $300 million and it is Vanuatu’s intention to fully implement this year’s budget.
Infrastructure Projects already approved and should begin this year 2020 sits around $100 million and should expand the economic capacity and also support jobs.
The downturn in Tourism has also seen the Vanuatu Government suspend the many regulations for procurement below $100,000 to enable contracts to be signed quickly and other projects can immediately start.
Tax Exemption Orders and other Fees have already been approved after the announcement.
Road Tax, Rent Taxes and business License have already come into effect and it is expected that more will be announced soon.
Small to Medium size businesses with a turn over of no less than