THE government has created a facility with commercial banks to allow tax-registered businesses to take out cheaper loans if they face cash flow constraints due to the Covid-19 lockdown.
This facility is also made available to individuals who pay taxes on employees, as well as self-employed workers who have lost all or part of their income or are experiencing cash flow difficulties due to the Covid-19 epidemic.
The Namibian reported on Friday that the government had advised businesses that may not have the funds to pay their taxes due to the impact of the coronavirus pandemic to obtain loans from commercial banks and pay their dues. However, this was a misinterpretation of the measures to be put in place.
Finance Minister Iipumbu Shiimi, who announced the government’s economic stimulus and relief plan on Wednesday, said the measures are aimed at mitigating the impact of the 21-day lockdown on the Namibian economy and households.
These loans, he said, would be guaranteed by the government, but only up to a certain amount.
“These companies can borrow an amount equal to one-twelfth of their tax payment in the previous fiscal year to be repaid after one year. The interest rate will be concessional, lower than the prime rate, thanks to the guarantee of the government, ”he said.
The above guarantee would provide relief of up to N $ 470 million for corporate tax in the non-mining sector and N $ 1.1 billion for taxes on employees. Applications for these loans should be made through commercial banks.
Shiimi also said the government, together with banking institutions, could institute statutory and administrative measures to improve compliance with loan conditions.
* This article has been revised.