Counting the cost: Employers place monetary demands to Govt

Employers in the country have proposed to government to waiver some taxes and provide some economic relief should the nation come to a lock down in the wake of Covid-19 pandemic.

In the proposal, the Employers Consultative Association of Malawi – Ecam has asked government that in the event of a lock down, Government should find ways and means of compensating employees for example from pension funds because industry will not afford this.

Ecam has also proposed to government that in the event of a lock down it should suspend PAYE within that period in order to reduce the liquidity burden on employers and enable payment of wages.

According to a proposal seen by MIJ Online, which has been signed by Ecam Executive Director- George Khaki, the association has called on government to consider taking and especially discuss with the business community measures that will ensure survival of the private sector

Khakhi has made the call.

“On  employee salaries, we suggest that in the event of a lock down, Government should find ways and means of compensating employees for example from pension funds because industry will not afford this.

In case of a lock down, we propose to Government that PAYE should be suspended within that period. This will reduce the liquidity burden on employers and enable payment of wages, reads part of the proposal.

The association has also suggested that in an event of a lockdown, government should suspend PAYE within that period in order to reduce the liquidity burden on employers and enable payment of wages.

The association has also called on government to make a waiver on Corporate Tax on a pro rata basis to cushion liquidity challenges in the event of a shut-down.

According to the grouping, VAT on materials that are critical to the prevention and treatment of COVID-19 should be removed to make them affordable to Malawians.

“Government should facilitate the availability of low-cost loans to industries and companies affected by the shut-down.

These loans can be accessed through banks, other money lenders or other facilities with a prescribed cap on interest rates applied to any loans provided with funding that has been made available by Government for this initiative”. Said ECAM in the proposal

According to ECAM, a complete shut-down will not only be catastrophic to business but to workers and ordinary Malawians as well hence the need for collaboration in recognizing and identifying essential goods and services in order not to paralyze the economy, adding that the industry should be involved in the process to guarantee win-win solutions.

Meanwhile, Economic analysts have commended the move by economists body saying the innovating proposals are what the nation needs for the economy to survive the current pandemic.

Chancellor collage based economic lecturer Professor Ben Kaluwa believes the survival of the national economy will depend on the survival of the private sector, hence there is need to strike a balance.

“The balance is about milking, it’s like milking a cow; you should not milk a cow you do not feed. So this is a very innovative intervention by the industry, very interesting.

We see around the world, US in particular they are thinking of innovative ways of helping businesses. We know that the airline industry will be hit hard globally so the airline industry also need bail out.” Kaluwa said

According to Kaluwa, the nation should brace for economic hardships and take this as lesson to build resilience.

“We rely a lot on imports, so any embargo on travel will negatively impact on the flow of goods into Malawi”. Added Kaluwa.

 

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