THE government has created a facility with commercial banks to enable businesses registered for tax to take up cheaper loans if they face cash flow constraints as a result of the Covid-19 lockdown.
This facility is also being made available to individuals that pay employee taxes, as well as self-employed individuals who have lost income, or part thereof, or are experiencing cash flow difficulties due to the Covid-19 outbreak.
The Namibian reported on Friday that the government advised companies that might not have the funds to pay their taxes due to the impact of the coronavirus pandemic to get loans from commercial banks and pay their dues. This was, however, a misinterpretation of the measures to be put in place.
Finance minister Iipumbu Shiimi, who announced the government's economic stimulus and relief package last week Wednesday, said the measures are intended to lessen 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.
"Such businesses can borrow an amount equal to a twelfth of their tax payment in the previous tax year to be repaid after one year. The interest rate will be concessional, below prime, on the back of the government guarantee," he said.
The above guarantee would provide relief for up to N$470 million for corporate tax in the non-mining sector and N$1,1 billion for employee taxes. Applications for these loans would need to be made via the commercial banks.
Shiimi also said the government, in collaboration with the banking institutions, may institute statutory and administrative measures to enhance compliance with loan conditions.
*This article has been revised.