Ethiopia has not much financial package to offer to its business community affected by the Coronavirus situation. Government is attempting make tax a little easier by introducing economic stimulus package
As is the case with the rest of Africa, if not the world, Ethiopia’s economy is severely impacted by the Coronavirus disease. The issue has been a concern for the Ethiopian government.
The Council of Minister had an emergency meeting on Tuesday to pass a decision on the draft economic stimulus package. The decision is informed by the assessment that the coronavirus situation has economically affected the livelihood of the majority of Ethiopians
The package is partly intended to avoid layoffs of employees in various sectors of the economy. According to a report by state-affiliated Fana-Broadcasting Corporation (FBC), the Ministry of Finance proposed a detailed plan of actions, to the council, to help employees keep their jobs.
Businesses who have been donating to help support government response will pay up to 20 percent less (apparently based on their contribution) than what they are supposed to pay in taxes during the current fiscal year. Moreover, they are given a one-month extension to declare, pay value-added tax, and turnover tax.
Employers who are unable to pay pension contributions to their employers due to the economic slowdown could pay starting from July 8, 2020.
The s hotel and tourism sector have been severely impacted by the pandemic. Several hotel owners in the capital Addis Ababa and other cities have offered their hotels for the government to use them as isolation centers for travelers arriving in the country after the government introduced the regulation that all travelers had to go through two weeks of mandatory quarantine.
For example, Ethiopian Airlines, one of the major revenue earners for the country, reported about $550 million dollars in revenue losses since the pandemic hit in January. It has grounded over 70 percent of its planes and is now struggling to survive with income trickling from the Cargo stream.
Meanwhile, the Council of Ministers has also discussed loan agreements and drafted legislation for loan approval. Most of the funds will be spent on infrastructure and other development projects in different parts of the country. The leadership claims that the loans are Concessional loans in terms of interest rate (less than 1 percent) and grace periods. The Council has passed the draft agreement to the parliament for approval.
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