ECONOMY

Gov’t prioritizing support measures

gov-amp-8217-t-prioritizing-support-measures

Bombarded with demands for tax breaks and cash injections by all economic sectors, the Finance Ministry is having to prioritize interventions for companies and the economy as there is simply not enough cash to go round.

Ministry sources stress that caution is necessary as no one knows what needs may arise in the fall from a possible second wave of the pandemic.

After ascertaining the challenges being faced by each sector based on official data, the government is pointing on moderate tax breaks by sector, starting with food services. It will get harder once the government turns to tackling problems in tourism, air transport, coastal shipping and ferry services, with a source pointing to the possibility of inexpensive loans backed by state collateral.

Many European Union member-states have resorted to state guarantees for supporting airlines following the relaxation of EU rules about state subsidies. It is very likely that the same model will be used for other sectors as well. Loans from the European Investment Bank and the Hellenic Development Bank, coming to a total of 10 billion euros, will also be utilized.

Sources say that the following are among the proposals submitted by the relevant ministries: The reduction of the corporate income tax deposit from 100 percent to 70 or even 50 percent, on the basis of a 2013 law for companies whose turnover it hurt by external factors; the reduction of value-added tax on coffee at cafeterias from 24 to 13 percent, and possibly the cut of the VAT on food services from 13 percent to 12 or even 11 percent; tax breaks for landlords whose commercial or residential tenants are paying 40 percent less; and new payment plans for tax dues in 2020.

Several ideas for boosting tourism, air travel and coastal shipping are also on the table. These include the abolition of the accommodation tax, which rages from 0.5 to 4 percent depending on the accommodation unit, and the reduction of VAT on hotel stays, transport and coastal shipping.