Thousands of companies abuse state aid: it is considered that the measures that expire are extended but are hardened Business

The president of the Seimas BFK Mykolas Majauskas has pointed out that today the two main measures of support to companies are subsidies after downtime and tax deferral.

They both demand $ 150 million every month. 50 million euros per month in tax deferrals The wage allowance after downtime is 100 million euros. euros. 500 million euros have already been spent on this last measure.

“Both injections will expire in the near future – post-downtime subsidies will last until December 31, tax deferrals – until the end of February.” It would be worth discussing whether to extend these measures, because an abrupt cut-off when seeing the second wave would not be appropriate ”, confirmed M. Majauskas at the meeting.

It is true that it is considered that if the support measures were extended, the circle of beneficiaries would have to be narrowed and the conditions hardened, because currently those who do not need it also benefit from the support.

During the meeting, the head of the State Tax Inspectorate, Edita Janušienė, stated that, according to the new list of restricted activities during quarantine, taxes could be deferred to half of the companies, instead of 62 thousand. 35 thousand would remain.

“I think the amounts needed for the support, if the postponement were even more precise, would be less than what we are talking about this year’s situation,” said E. Janušienė, but so far he has not been able to say what amount would be needed for month.

The communication from the European Commission would allow the tax deferrals to be extended until July 1.

Thousands of companies are abusing

Extensions of wage subsidies after downtime are also being considered, but the Employment Service, which administers them, recognizes that the support should be more targeted.

Today, there are many cases of abuse, and support is provided to those who are not victims, according to the service.

Giedrė Vitė, Deputy Director of the Employment Service, mentioned several cases of abuse at the meeting. For example, employee contracts are changed from fixed term to indefinite, because in this way the company receives a greater benefit. G.Vitė added that this would not be a bad trend, but there is still a risk that the employee will be fired after payment of the subsidy.

Another visible abuse is that the amount of the subsidy paid decreases proportionally, so that after a few months the subsidy is reduced to 30%, the company again announces downtime, because during them the subsidy is higher.

It has also been observed that employers can use subsidies by hiring workers only during the subsidy period and even posting partial downtime for several days or hours to take advantage of subsidies after downtime.

Additionally, a significant portion of post-downtime subsidies are made up of companies included on the STI-approved COVID victim list, although they did not actually stop their activities and did not allow people to enter downtime.

“The abuse cases presuppose that employers who have not necessarily suffered from the coronavirus are also trying to get support from the state,” said G.Vit afirmó.

Inga Balnanosienė, Head of the Employment Service, added that there are thousands of these companies that can take advantage of the situation for support.

“We are not talking about abuses, but about companies that use the maximum support, not necessarily because it is necessary. There are not ten or one hundred companies of this type: there are 2.5 thousand of them, with about 30 thousand. employees who receive a 100% post-subsidy for 6 months. It is only what we can feel, what we can see clearly, ”emphasized the head of the Employment Service.

For this reason, it is considered that the extension of the measure should reduce the circle of beneficiaries, since, as pointed out by I. Balnanosienė, the measure is particularly important for certain sectors, such as tourism.

Various fuses are offered

I. Balnanosienė argued that some adjustments should be made, but it is necessary to continue paying the wage subsidy to employers who have declared downtime for their employees.

Among the proposed changes is the announcement of downtime for a period of at least 1 month. This would show a clear impact of the quarantine on the operations of the company, while avoiding cases where the downtime of the company is advertised for a few days just to meet the condition and be eligible for the subsidy.

100%, but not more than 1 monthly minimum wage, the amount of the subsidy would guarantee effective financial assistance and would not force employers to allow employees to do downtime (currently, part of the employer subsidy is reduced by up to one 30% due to higher subsidies).

It is also proposed to remove the link between the amount of the subsidy and the duration of the employment contract, as the current halving of the subsidy for fixed-term contracts shows that employers are changing the nature of the contract to a higher subsidy .

Furthermore, fixed-term contracts also have a relatively long duration (for example, 2 years), which places such employers at an unjustified disadvantage by receiving a lower subsidy.

Another proposal is to stop subscribing to the STI-approved list of COVID victims.

With the changes, funding would be cut in half

If the changes came into effect, the monthly financing need in the current situation would be 54.6 million. EUR (currently EUR 114.2 million), reported M. Majauskas at the meeting.

Currently, the subsidy is awarded to 26 thousand. companies for 211 thousand. employees, – if the conditions were stricter, it would be 16.7 thousand. companies and 85 thousand. workers.

The final decision on the new subsidy procedure will be made by the Ministry of Labor and Social Security.