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pulled apart
Requests for exemption of part of the taxes from entrepreneurs in the region are reaching the Kėdainiai district municipality. The last district council meeting was business-friendly, so more such requests are likely to come soon.
Here, Arvydas Petrulis, who runs the hotel and restaurant “Grėjaus namas” and the building supply store “1000 smulkmenų”, petitioned the municipality to release him from the obligation to pay the real estate tax by 2020.
A. Petrulis’ company is included in the list of companies affected by COVID-19. In the current year, due to the announced quarantine, it was unable to operate catering, accommodation and non-food stores, and therefore received no income. And the buildings in which the company operates are in the red urban area, so its tax value is high.
In considering the exemption issue, it was first proposed to apply 25% to A. Petrulis’s company. However, the Committee on Economic and Budgetary Affairs proposed that the two single-owner companies separate, given the fundamental differences between their activities and the quarantine restrictions applied to them. As a result, the losses are likely to be different.
Opinions differ
As the quarantine situation is extraordinary, there is still no methodology to determine how taxes should be reduced for businesses in the district. There is no clear procedure to determine the indicators and the amount of tax reductions, which has caused difficulties for some members of the Council.
Some suggested postponing the topic and dealing with it later, once clear guidelines for exemptions had been developed. Others have asked that nothing be expected, as taxes must be paid soon and it will no longer make sense for employers to wait for the next Council meeting.
Politicians also disagreed on the number of concessions the company should make to the company.
Proposed 25 percent. The tax reduction plan was chosen to calculate the time that companies could not operate during the first quarantine.
During the first quarantine, the companies were completely out of service for 2.5 months, making about a quarter of a year. In accordance with this, it is proposed to calculate the discount: how long the company has not worked, this tax discount should be applied to it. However, some proposed policies did not like this proposed waiver methodology.
Some Council members also proposed higher rates of 32%, 40% and 50%. looking for tax incentives.
Profits fell
Daina Balasevičienė, Director of the Kėdainiai Business and Tourism Information Center, collected data from 31 catering companies in the Kėdainiai district.
“Regarding the A. Petrulis companies, data was provided on the losses they suffered. The restaurant was not open at all during the quarantine during the first or second quarantine.
There are dozens of employees in full downtime, revenue is down 32 percent. The hotel is open, but the service is down, with eight idle employees. Profits decreased by 37 percent.
The construction goods company did not work at all during the first quarantine, it was able to work during the second quarantine, but the flow of buyers decreased. There are no employees in downtime, but the company’s profit decreased by 32%, ”reported D. Balasevičienė.
Symbolic support
Some members of the Council explained that when deciding on the subject of tax exemptions or reductions, the company’s tax reports should be analyzed, to calculate how much taxes the company has paid.
Deputy Mayor Paulius Aukštikalnis did not agree with this position.
According to him, the determination of the tax relief at that time should not be linked to the company’s tax returns, all the more so since part of the municipal tax exemption is a more symbolic gesture in difficult times for business.
“We are considering something symbolic, so it would not make sense to stick to the income statement. This is a symbolic help for the business, so it was suggested to count the number of days that the company did not work.
Let us understand that this symbolic gesture of ours will not really cover the losses suffered by all companies, ”said the deputy mayor.
New district council member Jonas Talmantas also urged politicians to make a quicker decision.
“Companies suffer losses every day, they have to pay taxes. Let’s not expect anything and we agreed on a percentage to compensate them for part of that annoyance.
I offer 50 percent. To compensate the hotel and the restaurant, let’s leave that 25 percent for the hardware store. After all, those who do it well, I think, have a conscience and don’t ask for help. And those who ask are not out of a good life, ”said the Council member.
Finally, the district council decided to reimburse the taxes of the A. Petrulis companies in this way.
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