Local business chambers are recommending that Government launch a National Recovery Fund, as well as additional tax credits for employees, and income support for self-employed persons, in light of the COVID-19 crisis in the country.
They are a few of the outcomes from a meeting of the business chambers on Monday 6th April, at which they discussed the impact of the pandemic on local businesses and the wider society.
The full text of an official statement, in which their key recommendations are made, follows….
The Joint Chambers (AMCHAM T&T, Energy Chamber of T&T, T&T Chamber of Industry & Commerce & T&T Manufacturers’ Association) along with the Confederation of Regional Chambers held a meeting on Monday 6th April 2020 to discuss the effects of the COVID-19 pandemic on local businesses and the wider society. Several initiatives already announced by the Government were discussed and the members of the group expressed appreciation for the support facilitated by the Government. However, the need for implementation around several of these announcements was also highlighted.
Members of the group acknowledged the unprecedented nature of the crisis facing the world and the complexity of dealing with the fallout.
Following the meeting, the group agreed that the following five items will be critical in the immediate term.
1. With the majority of businesses suffering from a near total collapse of sales and therefore thousands of individuals facing a fall in income, we appeal to the Government to support the retention of employment through a tax credit on salaries for companies who realise no profits during this period. We propose that, for each employee that the registered businesses keep on their payroll through the next three months (i.e. April – June 2020), the government grants an additional tax credit (of between 100% – 150%) of the first $6,000 of the employee’s salary. This tax credit can be applied proportionally over a three-year period, starting Q3 2020.
2. We propose that the Government extends income support to the self-employed and their employees in the “informal” sector. We recommend this support for the “informal” business owners and their employees at minimum, under the same terms as the salary relief grant to retrenched employees, once these businesses and their employees register with the BIR.
Unregistered businesses could be encouraged to register, possibly through their regional corporations, with the understanding that they will be forgiven for past non-payment of taxes but will be required to pay going forward. Such a move will widen the tax net and assist with the rebuilding of Government revenue once business and social activity return to some level of normalcy.
3. Based on the substantial excess funds both US$ and TT$ in the banking system, there is an opportunity for GORTT to mobilize these funds and launch a National Recovery Fund denominated in both currencies. Any business or citizen can make a contribution, however small.
There should be some form of incentive by way of deduction for tax purposes over the next 5-10 years at 150%. Ideally, it should not be structured in the form of debt, so as not to impact GORTT borrowing limits and debt ratios. This Fund must be kept separate from other funds and overseen by a Board made up of reputable private sector and government representatives. It should be used to improve the ease of doing business and for employment generating activities.
4. While we understand that this is a tricky issue and directly impacts the Government’s cash flow and therefore ability to cushion the fallout to all sectors of society, we ask Government to still consider a deferral of corporation tax and value added tax payments for the upcoming period through June 2020. We believe the temporary cash flow interruption to Government can be managed, in light of the HSF withdrawal and the realisation of virtually budgeted corporation tax receipts in Q1 2020. We also ask for a waiver of penalty interest for late payment of same for Q1 and Q2 of 2020.
The business groups are however, appealing to all businesses—large and small—that are able to make these tax payments during this period, to do so. We expect all businesses to continue payment of NIS and Health Surcharge.
5. Clarity needs to be given on the education system going forward. The Chambers call on the Government to design, clearly communicate and implement a plan to ensure that teaching and learning can resume after April 20th, 2020. The Chambers are willing to work with their members to explore means of supporting this effort.
We also commend the many companies who are already doing what they can to minimise the disruption of education. We highlight companies such as TSL and Atlantic for making the Pennacool system more widely available and the myriad of technology companies and service providers who are assisting with implementation of online learning solutions. However, we acknowledge that not every school and certainly not every child will have access to technologically-enabled education and reiterate our willingness to support the education system in bridging these gaps to the extent possible.
While we recognise that these measures are but a small part of what needs to be done to bring stability and then get to recovery, we do hope that the Government will consider and implement these measures as we believe they will go a long way in building trust and confidence and give business some minor, but needed relief in the current, very difficult environment.