Ecam weighs in on possible lockdown

Ecam weighs in on possible lockdown

Post was last updated: March 31, 2020

Employers Consultative Association of Malawi (Ecam) has said government should consider compensating employees from pension funds and suspend Pay As You Earn (Paye) tax in the event of a lockdown.

This comes at a time countries in the region such as South Africa and Zimbabwe have effected a lockdown to combat the spread of the coronavirus.

A statement signed by Ecam Chief Executive Officer, George Khaki, proposes that the government should constantly engage the private sector before announcing measures taken to prevent the spread of the virus to preserve economic gains registered in recent years.

The association has also proposed removal of the Value Added Tax (Vat) on materials that are critical to the prevention and treatment of Covid-19 and waivers on some taxes.

“We would like to propose that the government makes a waiver on Corporate tax on a pro rate basis to cushion liquidity challenges in the event of a shutdown and that the government should continue discussing with the business sector on how best to work together” reads the statement in part.

In an interview yesterday, Khaki said there is need for the government to ensure availability of low-cost loans to industries and companies that may be 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 the government for this initiative.” Khaki said.

In a separate interview, TNM Chief Executive Officer, Michiel Buitelaar said dialogue between the government and the private sector remains critical at this point.

“More has been done already to prepare the country but we still need to continue talking and working together to ensure the economy and other services are not affected,” Buitelaar said.

However, Commissioner of Labour in the Ministry of Labour, Skills and Innovation, Kelvin Nyangulu, said the government is already doing all it can to adopt best available practices under such situations.

“Those are just proposals but we need to understand that while we are considering them, we cannot just adopt measures being implemented in other countries because the economies are different,” Nyangulu said.

Recently, President Peter Mutharika issued a presidential order, banning gatherings of more than 100 people.

A ministerial committee on the pandemic also announced a ban on passenger bus services to and from the country and grounding of flights among other measures to prevent spread of Covid-19 in the country.

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