First steps to soften virus blow

Gov’t announces suspension of VAT, social security contributions and debt repayments

The government announced yesterday the first set of measures aimed at easing the blow on the economy from the expansion of the coronavirus outbreak. At this stage, the measures concern companies that have stopped operating for at least 10 days on the orders of the government.

A second batch of nationwide measures is expected by the end of the month, benefitting companies that have suffered a significant drop in turnover (the threshold may be 25 percent) but have not had to suspend operations. This will be conducted based on data per sector and geographical region, and the interventions will be related to the suspension of tax and social security contribution payments.

A third package of measures will constitute injections of liquidity for corporations and possibly households as well. In any case the measures will have to be approved at the European level, government sources stress.

The International Monetary Fund is in favor of boosting households and enterprises with cash, salary subsidies and tax breaks, though this means that the budget and the fiscal targets set will be affected.

The first package announced yesterday concerns the suspension of value-added tax payments and of installments for the settlement of debts until the end of the month for areas where companies have shut down on the government’s orders for at least 10 days. The state also allows for the suspension until June 30 of payments of all social security contributions, and until March 30 of tranche payments to social security funds for regions where enterprises have shut down.

Labor Minister Yiannis Vroutsis added yesterday that some regulations are being lifted so that employers can organize how their employees can work in a faster and more efficient manner. The government is also encouraging staggered shifts at work and the creation of conditions by enterprises for working from home, where this is technically feasible.