At a regional level, and given the overspecialization of the economic agents in the tourism sector (hotels, restaurants, services, marketing and digital services), the COVID19 mitigation measures applied by governments all around the world have targeted directly and very intensely the micro, small and medium companies of the region. Flights are prohibited for most cases, stopping the arrival of tourists from other EU regions. Hotels are closed, facing cancellations and no new reservations for a near future. Restaurants are closed and with no expectation of clients in the near future. Services are in suspense, given their dependence from hotels, restaurants and the arrival of tourists.
Hence, the Portuguese government has declared an EMERGENCY STATE, and launched a number of initiatives directed to mitigate the COVOD19 situation, with a direct impact on the clinical situation, but also on the real economy, from lockdown to liquidity, in order to support SME’s and defend employment.
Bellow a short description of the main measures introduced:
CREDIT LINES
These measures (max duration of single operation is 4 years) are directed to the following sectors:
1. Restaurants and similar: 600M€, from which 270M€ are directed to Micro and Small Companies. The max amount per company is 1.5 M€, with assurance up to 90% and a grace period of up to one year.
2. Tourism – Travel agencies, animation and events: 200M€, from which 75M€ are directed to Micro and Small Companies. The maximum amount per company is 1.5 M€, with assurance up to 90% and a grace period of up to one year.
3. Tourism – Hotels, hostels and similar: 900M€, from which 300M€ are directed to Micro and Small Companies. The maximum amount per company is 1.5 M€, with assurance up to 90% and a grace period of up to one year.
4. Industry – Textile, Clothes, Shoes and extracting industry, Wood and Cork: 1.300M€, from which 400M€ are directed to Micro and Small Companies. The maximum amount per company is 1.5 M€, with assurance up to 90% and a grace period of up to one year.
The Government continues to monitor the situation is preparing additional support to other affected sectors, such as trade.
Hence, more credit lines are also available in a total of 260M€, to:
• 200 Million Euro credit line for working capital.
• 60 Million Euro credit line for micro-companies operating in the tourism sector, managed by the national tourism agency.
All these measures are being updated daily under the EuroGroup.
The overall goal of such measures is to allow for the SME’s to access working capital for this period of lack of economic activity, in order to fulfil their responsibilities in what regards to employment, suppliers and fiscal.
WARRANTIES
Ongoing adherence to the guarantee program announced by the EC and the EIB / FEI Group, which will allow the strengthening of capital financing to Portuguese companies.
EUROPEAN FUNDS (PORTUGAL 2020)
The ongoing operation program has been revised in order to integrate some changes in the scope of the COVID19 situation, namely:
• Reduced payment deadlines
• Deferral of incentive repayment instalments for companies with decreases in turnover or in requests greater than 20%, in the two months preceding the submission of the request;
• Eligibility of costs with cancelled or postponed actions.
FISCAL
In order to support the companies at a fiscal level, the Portuguese government decided to delay some fiscal obligations, such as:
• Postponement of the Special Payment on Account from March to June;
• Extension of the delivery of fiscal Declaration and payment to July;
• Extension of the first payment on account and the first additional payment on account from July to August.
Considering the fiscal calendar related to payment obligations for the second quarter of 2020, the Government decided to make the payment of taxes more flexible for companies and self-employed workers. This flexibility allows that, on the due date of the payment obligation, the following options are available: immediate; in three months without interest; in six monthly instalments and interests applicable for the last three.
For any of the above-mentioned situations, additional warranties are not mandatory. These measures cover the payments of VAT and the delivery of withholding taxes to the State of IRS and IRC. Measures are also applicable to self-employed workers and companies with turnover up to 10 million euros in 2018, or beginning activity as of January 1st 2019.
SOCIAL SECURITY
Under the scope of COVID19, the payment date for social security, due on March 20th has been suspended. During the months of March, April and May, the social security contributions are temporarily reduced by 2 thirds, with the remainder paid in 3 or 6-month instalment plans from the second half of the year.
Prepared by Hugo F. Barros, University of Algarve, CRIA
