18 Feb 2024

The guiding principle on post COVID-19 recovery is not meant to tax people in order to raise government revenue.

Minister of Finance, Ms Peggy Serame said the overall policy included a holistic approach that might have included a revision of some taxes and levies. 

She noted that taxes were some of the instruments that were available to government when it came to resource mobilisation.

During the 2022-2023 financial year, she said government responded by reducing Value Added Tax (VAT) for a few months, adding some goods to the list of zero-rated items and exempting some services from VAT.

Furthermore, she said the guiding principles were premised on a number of variables and that short-term objectives revolved around improving efficiency of public spending and mitigating fiscal risk, enhancing domestic resource mobilisation, enhancing agriculture, tourism and industrial sector productivity and value addition.

Minister Serame also said the short-term revolved around improving the enabling environment for private investments, improving the micro, small and enterprises development framework and capacity as well as enhancing social protection and gender empowerment.

Minister Serame noted that governments around the world had adopted different approaches as guiding principles for post COVID-19 recovery since every economy was unique.

She said when faced with short-term economy shocks, recovery programmes of each economy would depend entirely on the structure of the economy and its level of development as well as other factors such as the level of savings and its vulnerabilities. 

“The same may be said about how governments around the world responded to the COVID-19 pandemic. It is for this reason that even this year I have proposed different initiatives under the auspices of a stimulus budget,” she said.

One of the proposed initiatives, she said, was the Chema Chema Fund, which would have an initial capital of P200 million and was expected to facilitate access to credit the informal sector and to equip the sector with modern business skills and strategies.

Specially Elected MP, Dr Unity Dow had asked the minister to state if government’s guiding principle on post COVID-19 recovery was taxing people to raise government revenue or reducing taxes to assist individuals with mounting fuel, food and other rising prices.

She also asked what had informed the guiding principle. 

Dr Dow had also asked if the adopted principle was the most common one around the world, if governments were taxing their citizens more or trying to put money in citizens’ pockets as a way of assisting in post COVID-19 recovery. ends