Update on The Vanuatu Government’s Economic & Financial Stimulus Package

Click HERE to download this information in French.

Click HERE to download this information in Bislama.

Click HERE to download this information in Chinese.

 

This newsletter contains a lot of important information for employers. We are providing information about the Vanuatu Government’s Economic & Financial Stimulus Package as we know it’s important for your businesses to access this as soon as possible. This includes information regarding taxes, financial support for employers, residency permits and VAT.

Please carefully read the relevant sections below and note there are links to supporting documents also.

The three core areas VCCI will be engaged to communicate and provide support on are:

1. Tax Relief
2. Employment Stabilization Payment
3. Business Support Program

It will take time for the government to finalize methods of delivery on all of these. Where we have specific updates for you we have outlined them below:

A. Tax Relief –The following taxes will no longer be required to be paid in 2020:

• • Road Tax
  • Work Permits
  • Business License
  • Residence Permits
  • Rent Tax (due in June)
  • Additional other fees will be looked at (at a later date)

The department responsible for each of these taxes will issue statements on the changes and how they are applied. We have received the following to date:

• Department of Immigration has issued a directive focusing largely on residency and you can access it HERE
• Customs and Inland Revenue has issued a directive on on Road tax, Business licenses and Rent tax. and you can access it HERE

B. Employment Stabilization Payment

We understand Employers are keen to receive more information about the Employee Stabilization Payment as soon as possible. We understand this is important support to your cash flow and affects decisions about your employees. Here’s what we know now:

1. This employee stabilization payment is the priority item being actively worked on by Finance and VCCI now.
2. This is a support to employers who have kept staff employed and who have accurate and up to date VNPF payment records.
3. 30,000vt will be the maximum monthly payment per employee (for example for an employee with a salary of 45,000vt i.e over 30,000vt threshold, will receive the maximum benefit)
4. Employees who earned less than 30,000vt per month, will be paid the same salary that they previously received. For example if someone earned 15,000vt per month, if they continue to be employed, the employer will receive 15,000vt stabilization payment for that employee.
5. Employers may access this monthly payment for the months of March, April, May and June 2020. This will be paid in arrears after month ends.
6. The Employment Stabilization Payment form is being developed now. As soon as this is ready, we will be making it available to businesses.
7. For now it is important you continue to provide employee payments, payslips and pay your VNPF on time. Please maintain good records of these.
8. VCCI will be providing more details to employers and employees in three ways:
   1. On the VCCI website
   2. Via hotline 119, and
   3. Face to face appointments for businesses who require this level of support

We expect to have these service up and running by Tuesday 7^th of April.

C. Business Support Program

For businesses who have a turnover of less than 200 million Vatu there will be a one off payment equal to the value of the fees of a full year business license.

It is not yet clear exactly how this will be implemented. The focus will first be on the employee stabilization payment and when this is done, it will move to items such as this one.

ANSWERS TO QUESTIONS YOU MAY HAVE:

1. Do I need to continue to pay Vat – There are no changes to the VAT requirements at this time. You will need to continue to pay or claim refunds as normal
2. Can I claim back my business license if I have already paid it for 2020? – not at this time, however if you read the Customs & Inland Revenue document (linked here) carefully you will note that there may be more information available on this later.

3. Are there any changes to the labour laws (redundancies, severance) etc? – not at this time, however we are working closely with the Department of Labour and will update you on any changes we are made aware of.