Finance Ministry Explores Innovative Approaches to Social Welfare

The Ministry of Finance is exploring new ways to support vulnerable households beyond traditional cash grants, Finance Executive Director Dr. Michael Humavindu has revealed.

The social welfare program currently supports pensioners, children, foster families, people with disabilities, and poorer households through grants, including a $690 per month conditional basic income grant. However, a recent reclassification by the World Bank showed that the poverty rate has risen from 18% to 22% of the population, prompting discussions on more effective ways to assist those in need.

Dr. Humavindu explained that while direct cash grants are critical, there are alternative approaches, such as zero-rating VAT on essential items to reduce household costs. “Even if you provide cash, poorer households might have a better chance of sustaining themselves if certain critical goods are tax-exempt,” he said.

The Ministry has already begun working on policy proposals that would complement ongoing tax reforms. Dr. Humavindu emphasized that public input will be crucial and that the goal is to present proposals within the next 15 to 18 months, potentially integrating them into next year’s legislative amendments.

“Our mandate is to ensure that financial resources reach households in ways that not only provide immediate relief but also strengthen long-term sustainability,” Dr. Humavindu added.

The discussions mark a step toward more holistic social welfare policies, combining financial support with strategic tax adjustments to address the multidimensional challenges of poverty across the region.