April 6, 2020
Namibia announces Economic Stimulus and Relief Package to mitigate impact of COVID-19
Namibia’s new Minister of Finance, Honorable Iipumbu Shiimi, announced, on 1 April 2020, the launch of an Economic Stimulus and Relief Package to mitigate the impact of COVID-19 in Namibia. The first phase of the Economic Stimulus and Relief Package is geared at addressing the negative effects resulting from the first 21-day lockdown period which ends on 20 April 2020.
The Government of the Republic of Namibia (the Government), in collaboration with stakeholders and development partners adopted a Stimulus and Relief Package amounting to N$8.1 billion in total. It comprises approximately N$2.1 billion in direct support to businesses and households, N$3.8 billion in accelerated value-added tax (VAT) refunds and payments for goods and services supplied to the Government as well as N$2.3 billion by way of loans to be guaranteed by the Government.
The relief package inter alia includes measures aimed at supporting businesses and households by way of wage subsidies and government-backed loans to formal and informal businesses in sectors which are directly affected by the lockdown measures and one-time income grants to persons who have lost their jobs due to the pandemic and its fallout.
For businesses, the following measures are proposed to maintain business cash flow and continued productive economic activities:
For households, the following measures are proposed to cope with reduced income, increased health-related spending and other hardships due to the virus outbreak:
The relief measures will take effect immediately. The Minister of Finance has given the assurance to the business community at large that the Government will continue to support economic activities as well as households during the lockdown and the recovery phase thereafter. He has also called on domestic and external financiers, development partners and stakeholders to work in partnership with the Government during this challenging time. The Minister also urged the business community and employers to avoid laying off workers at this point in time.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Namibia, Windhoek
Ernst & Young Namibia, Walvis Bay
Ernst & Young Advisory Services (Pty) Ltd., Africa ITTS Leader, Johannesburg
Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London
Ernst & Young LLP (United States), Pan African Tax Desk, New York