UPDATED with figures.
Premier and Minister of Finance Easton Taylor-Farrell has outlined what he called the first phase in a package of support to address the social and economic challenges brought on by the COVID-19 crisis.
“I am cognizant that the measures taken by my government has created some economic hardship for many businesses and individuals, and as indicated in previous press briefings, my government has presented an economic stimulus package to Department for International Development (DFID) for consideration. That package is presently being discussed between Montserrat and London and we do expect a favourable response. I am assured of that by the Minister,” the premier said in a prepared statement released on Wednesday morning.
However, he said his government had no control of when London would approve and dispatch additional funds and so they have approved a package of support for affected sectors. He noted that the tourism sector has seen significant fall as a result of cancellations of hotel and guest house bookings. The Taxi and Tour operators have suffered because of cruise ship cancellations. Some workers are being temporarily put out of work and promoters of shows and vendors have all suffered, during March from the cancellation of the St. Patrick’s Festival on the peak weekend.
Increase the tax threshold by $5,000, to $20,000 from January 1, 2020. The new tax bands will be:
i. Annual Income of $0.00 to $20,000 – attract 0% tax
ii. Amounts over $20,001 and between $25,000 – attracts 10% tax
iii. Amounts over $25,001 and between $30,000 – attracts 20% tax
iv. Amounts over $30,001 and between $150,000 attracts 30%
v. Amounts over $150,001- attracts 40% Tax
This will provide direct support to workers, especially the lowest paid, by reducing the level at which they begin to pay tax. This provides employees with more expendable income each month – putting money straight into people’s pockets for essential items and expenditure.
Direct financial support to employees in the Tourism sector; including hotels, tour operators, restaurants, and transportation services. Government will pay at least 80% of salaries up to a maximum amount of $3,200 per month (equivalent to 80% of a $4,000 salary). This will be based on the previous six months salary level, i.e. if an individual in the tourism sector was paid $3,000 per month for the past six months, that individual would receive $2400 (80% of $3000).
Income Tax would still be payable but at the new tax rates, outlined above. Payments will be made directly to the employer´s Bank Account to allow them to continue to make salary payments and keep staff employed during the crisis, as the business is now closed or has ceased to operate. This support will be for an initial period of three months, and may be extended as it is subject to review in the coming days. Further details on who can claim and details of process, will be issued shortly. However, this incentive only applies if your major source of employment income is from the Tourism Sector.
Provide Covid-19 Benefit Support – to provide $900 a month (food package and cash support) to persons who do not have any work and unable to access other Social Security benefits and other financial support. Persons will be asked to register for these assistance via the Social Services Department. Further details on the registration process will be announced. This support will be for a limited period of three months.
Social Services to provide additional food package top up for vulnerable low income earners and other low income groups.
Additional support will be provided to the Social Security Fund as required. The Social Security is an important protection system for our island and Government stands by and fully supports the Fund.
SUPPORT TO BUSINESSES:
Deferral (postponement) of all business related taxes (Accrued and Current) for all businesses. This support will be for an initial period of three months, and may be extended subject to further review.
Deadline extension for the annual returns for businesses to the Financial Services Commission by three months, and no penalty charges will apply during this period.
Cash injections will be provided to fund a grocery delivery service. This aims to cover the additional fuel, equipment and PPE costs to provide this essential service. This will be done in conjunction with the Red Cross. An initial allocation of $25,000 has been provided.
Support will be provided for food delivery to the most vulnerable in our communities, ensuring that no one goes hungry during this crisis. Government has provided an additional funding of $50,000 to the Meals on Wheels service to enable it to make improvements in service provision.
The Government of Montserrat has agreed with Montserrat Utilities Limited that no further disconnections of electricity and water will take place until further notice.
The Government will, where feasible, and within the restrictions of the Government’s public health orders, continue to progress our capital project portfolio. While some physical works will cease, we will continue to progress with design and procurement work to ensure that we mitigate schedule impacts to our overall capital investment programme.
Food security and production will be enhanced through direct investment in our farming operations and support to identified producers with a total cash injection of $641,000 which will cover a number of developments:
o Provision of seeds and planting materials, and increase production of the government nursery;
o Enhancement of sheltered production systems;
o Increase in chilled storage facility to extend product shelf life;
o Provision of irrigation systems;
o Land preparation, where required and feasible;
o Assistance with poultry chick purchase;
o Provision of materials for pens or storage structures.
Further details will be provided by the Ministry of Agriculture, Lands, Housing and Environment in due course.
All amounts quoted above are in Eastern Caribbean dollars.
“The above measures will be given in more details by the various ministries, as we continue to cushion the socioeconomic fallout caused by the COVID19.
“Be reminded that we are nowhere near the end of this crisis, as a matter of fact we have just begun but be assured that your government will stand by you and together we will get through this, and will return even stronger and better than before,” the premier cautioned.