24th September 2020, Skopje – “Support for payment of wages for the months of October, November and December, EUR 100 million as loans under favourable terms and conditions from the Development Bank, state loan guarantee, state customs guarantee, additional extension of loan repayment for companies by the end of the year, deferred payment of VAT for companies, domestic payment card for single parents, low-income pensioners, passive job seekers, reduction and/or abolishment of parafiscal charges” are only some of the measures covered under the fourth set of measures, being adopted at Government’s session yesterday.
Support for payment of wages will be provided in line with the decline in the income at companies. In fact, the greater the decline in the income of the companies covered by this measure, the greater the Government support for the payment of wages, which will range between the so-far Denar 14,500 and Denar 21,776. This will provide for greater stability as regards the jobs. The new methodology for government assistance for paying wages will provide for supporting 83,000 jobs per month, i.e. total of 250 thousand wages for the last quarter of this year. This measure amounts to EUR 70 million, and in order to exercise the right thereto, the companies that will apply, must keep the number of their employees as of 31st July 2020 inclusive. This measure also applies for the persons performing independent activity, i.e. sole proprietors, persons performing agricultural activity, craftsmanship, and persons carrying out other services.
283 thousand citizens will receive payment cards, whereby this measure amounts to total of EUR 27.6 million. Thereby, 5,726 single parents, 182,271 pensioners with pensions up to Denar 15,000, 85,108 unemployed – passive job seekers and 520 self-employed artists, filmmakers, cultural workers and performing artists, will receive a payment card worth Denar 6,000.
“Buy at home” payment cards will also be allocated to 540 students, not having received these cards under the previous package. Additionally, 884 students and 347 pupils will receive support for pupils and student standard, a measure for which Denar 44 million has been provided.
This set of measures also covers the citizens who are over the age of 64, not receiving any pension or state social pension, whose income is lower than Denar 15,000, or generating no income at all.
Hence, this measure covers 283,000 citizens, amounting to EUR 27.6 million.
Extension of the grace period for interest – free loans under COVID-1. Under this measure, through the Development Bank of North Macedonia, the existing users of credit lines from this bank, will have their grace period extended by additional 3 months, before starting the payment of annuities of the granted loans.
Under the new package, additional EUR 100 million, as loans under favorable terms and conditions, have been provided from the Development Bank of the Republic of North Macedonia.
These loans under favourable terms and conditions from the Development Bank of North Macedonia, have been provided through the European Investment Bank, and they will be made available in January 2021, through the commercial banks, as support to domestic companies, at exceptionally low interest.
Several measures have been adopted as support to tourism. Minimum gross wage amounting to Denar 21,776 will be paid to 150 registered tourist guides for the months of October, November and December, through the measure – Wage support for tourist guides. Moreover, through the measure – Tourist tax refund for 2019, 4,740 entities having organized overnight stays in 2019, will be refunded EUR 2 million, which is the total amount of the tourist tax collected in the respective year. At the same time, all travel agencies, depending on the number of employees and the total turnover in 2019, as well as depending on whether they are holders of A or B licenses, will be extended grants from EUR 3,000 up to EUR 7,000, through the measure – Grants for travel agencies. 500 travel agencies will use this measure, the total amount of which is EUR 1.9 million.
Measure – Reduction and/or abolishment of parafiscal charges has also been adopted under this set of measures. In cooperation with the chambers of commerce, a list of priority parafiscal charges will be determined, such as charges, fees, permits, licenses, support on various grounds and their current reduction and / or abolishment of some of them.
Grants for restaurants for weddings have also been provided – support will be extended to all registered and licensed entities for this activity, in the total amount of EUR 1 million. The grants separately range between EUR 3,000 and EUR 10,000 depending on the turnover generated in 2019. Thus, the option for registration of such activity is to be provided since some of these activities are registered for organizing weddings, while the others are registered only for food supply.
This package also covers the measure – Extension of renewal of the work licenses for discotheques, night clubs, as well as the companies in the field of transport. According to the work registration, around 120 discotheques and nightclubs, as well as around 7000 transporting companies will have their work licenses extended in 2021 without fee, by which the transporting companies will be exempt therefrom by another year depending on the time period when their license expires.
Grants have also been envisaged for kids’ play areas. Grants in the amount of EUR 1,000 up to EUR 5,000 will be provided to around 1,000 kids’ play areas, depending on the turnover generated in 2019, whereby this measure amounts to total of EUR 2.5 million.
Support has also been provided to craftsmen. It stipulates reduced VAT on their services and products from 18% to 5%, aimed at strengthening their competitiveness on the market. The other measures, such as those for supporting the payment of wages or the access to loans under favourable terms and conditions from the Development Bank of North Macedonia, remain available to the persons performing independent activity, i.e. the craftsmen.
During the period of implementation of the fourth package, the measure – State loan guarantee, will also be put in practice. Under this measure, the state will make available financial resources in the amount of EUR 10 million as support to companies for easier access to cheap financial resources, by undertaking part of the credit risk. Under the state guarantee amounting to EUR 10 million, loans in the amount of EUR 65 million, will be made available to the business sector.
The measure Customs Bank Guarantee will be of great support to the companies. This measure is aimed at boosting the companies’ export and easier access to raw materials. Customs bank guarantee in the amount of EUR 3 million through the Development Bank of North Macedonia for covering the customs debt will support both the export and the import and will facilitate the access to raw materials, in the amount of around EUR 25 million, for processing for the Macedonian companies.
Additional extension of companies’ loan repayment by the end of the year is another measure aimed at facilitating the operations of the companies.
This set of measures also includes the measure Reduction of default interest on public duties by half from 0.03% to 0.015%, which application continues by the end of the year.
The measure Deferral of profit tax advance payment also continues to apply. This measure envisages deferral of profit tax advance payment by March 2021 for companies experiencing more than 40% revenue decline.
The measure VAT exemption on public donations will continue to apply for additional 12 months.
Reduction of VAT rate on restaurant services and serving food and beverages is one of the new measures. The respective services will be taxed with a new preferential 10% VAT rate instead of the existing general 18% rate. The objective of this measure is to reduce the informal economy, lower prices for the citizens, as well as higher liquidity of the hospitality industry for food and beverages. This measure requires legal amendments and its implementation will commence from 1st January next year.
For the purpose of facilitating the financial liabilities of the companies, Deferred VAT payment measure is adopted. This measure will allow for deferred payment of VAT, seven days following the submission of the VAT tax return, without any interest being charged thereon. One of the measure within the fourth set of measures for coping with COVID-19 consequences is Deletion of the requirement to collect points under the Continuous Professional Development (CPD) for extension of accountant licenses. 9,360 registered accountants are beneficiaries of this measure, for which the requirement to collect points under the Continuous Professional Development for extension of accountant licenses will not apply in 2020.
The measures also include Extension of the period for covering losses to be set off against future profits. Under this measure, the obligation to cover losses to be set off against future profits, prescribed in the Law on Profit Tax, will be abolished. At the same time, under the proposed amendments, deadline for carrying the loss forward will be extended, setting it off against the profit up to five years, instead of the existing legal solution, prescribing carrying the loss forward against the profit up to three years. This measure will be launched this year and will be in effect in 2020 and 2021.
Next measure in the field of tax policy is Raising the threshold under which the entities would not be subject to PT taxation regime and raising the threshold under which entities would be subject to total income taxation regime. The measure envisages for the threshold to be set at Denar 5 million annually, pursuant to which the respective taxpayer will not be subject to the PT taxation regime. The measure envisages for the threshold to be raised under which the companies would be subject to the total income taxation regime, i.e. legal entities, generating total income between Denar 5,000,001 and Denar 10 million, to be able to choose whether to pay profit tax or to shift in the total income taxation regime of 1%. Under this measure, around EUR 1.15 million will be made available, which the companies can reallocate for investments or other development business plans.
The measures Recognizing private health insurance costs as an eligible cost and Recognizing the costs for COVID-19 testing, also as an eligible cost, are included in this set of measures.
The measure Reduction of import duties for raw materials and intermediate goods provides support to the most affected manufacturing industries, as well as stimulus for development of the manufacturing capacities. This measure, in addition to all measures for raw materials defined on 24th December 2019, includes the reduction of import duties for natural gas, the ultimate objective of which is not only the economic, but also the ecological, effect.
As regards the measure Support to human capital development, this set of measures envisages profit tax and PIT exemption for employee-related costs pertaining to additional qualifications and team building.
PIT on employee-related costs pertaining to training, qualifications, obtaining licenses will be abolished, providing for improvement of the quality of the work force the companies have, at the same time prescribing a legal limit on such costs, for instance, an average wage on annual level. This measure will be launched on 1st January next year.
The measure Support to purchase of grape from 2020 harvest envisages EUR 6.7 million as support to wine grape producers having sold their grape at registered wineries, as well as to wineries for the transportation costs at export. Each exporter will receive a subsidy according to the quantity of exported wine, to be paid gradually, depending on the quantity of exported wine.
As regards the game of chance sector, the measure 2/3 exemption of the legally prescribed amount for the organizers of games of chance is envisaged. Under this measure, organizers of games of chance, casinos, will pay 1/3 of the fees for automatic roulette tables or other tables.
In order to facilitate the operations of the municipalities during COVID-19, the measure Changing the calculation for the base for financing local government units is adopted, under which, when allocating funds to the local government units, the calculation of the average VAT collection in the previous three years will be taken into account, instead of the previous year alone as so far.
The measure VAT-free weekend is also included in this set of measures. The measure covers more than 350,000 citizens, users of “MyVAT” application, who can buy domestic products and services and computers, as well as other IT equipment, during the period from 10th to 12th October in the amount of up to Denar 30,000 and be refunded the whole VAT within several days. Sales in the amount of EUR 170 million is envisaged to be generated under this measure, funds to be injected in the economy, whereby EUR 17 million will be refunded to the citizens on the basis of VAT.
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