The pandemic has caused a toll on the global economy, and countries across the world are planning measures to mitigate the losses and bring back the economy to its feet. One of the policies considered in the process is tax breaks for Small and Medium-Sized (SME) businesses.
SMEs are the heartbeat of the economy and its sustainability during this time is very important. Former Secretary of State for Exiting the European Union David Davis has said that it is the men and women running small businesses who will lead the recovery, not the multinationals and conglomerates.
The government has introduced a stimulus package of MVR 2.5 Billion including loans for SMEs. This includes MVR 1.55 Billion for SMEs to meet short-term working capital needs.
In the long run, SMEs will need more leniences other than the loans through the stimulus package. The stimulus package is expected to assist the SMEs to survive the pandemic. However, they will require more financial assistance to stand in on feet after the recession.
David Davis has suggested tax breaks for SME to re-generate the economy after the recession. Even the $2.2 Trillion stimulus package by the United States include tax breaks that will let corporations reclaim taxes paid on profits as far as back 2013.
Tourism industry stakeholders have even called for tax breaks instead of loans. CEO of Reollo Travel and airline Manta Air Mohamed Khaleed has said that resorts can be given tax breaks but they should be removed from the stimulus package.
The goal of tax breaks is to quickly infuse cash into suddenly struggling firms whose revenues are collapsing due to lockdown and halt in economic activities.
