Not just luxury cars: the companies that received support also bought jet skis and yachts

A year ago a similar number of water transport companies were bought for entertainment.

“The vast majority of these companies are not engaged in water transport, water sports or entertainment. It is mainly real estate, freight, construction materials, tobacco products companies, law firms. The question arises of why companies need yachts, if it is not related to their direct activities ”, compares M. Majauskas, president of the Budget and Finance Commission of the Seimas.

More than half of the companies are officially recognized as affected by the COVID-19 pandemic, and most of them have received support from taxpayers: subsidies for downtime, subsidies to maintain jobs or simply state support for business promotion .

“Every year, companies buy these assets on behalf of the company, which is not related to the activities of the company. A year and a half ago, there were between 80 and 90 such acquisitions in 2019. In 2020, we see more than 100, that growth is around 20 percent. by year. And of those 109 cases, the data is so far preliminary, with around 40 to 50 acquisitions made by companies that have been officially recognized as affected by the COVID-19 pandemic. There are cases in which the companies also bought several boats or jet skis ”, M. Majauskas reviewed.

M. Majauskas emphasized that luxury in itself is not an evil or a crime, but doubts existed as to whether in all cases it is appropriate to pay taxes to the state, or whether state support is used for its intended purpose. He compared that such trends can indicate consumption by business owners.

“The costs of acquiring, maintaining and operating luxury assets are often included in the operating expenses of companies. In this way, value added tax is returned and income tax is reduced. These assets are also used. often for personal purposes, but the benefits received are not counted as income in kind. This also avoids personal income tax, “says M. Majauskas.

M. Majauskas trusts that the State Tax Inspection will be asked to find out if the acquisition and maintenance of luxury real estate are not included in operating expenses, if the luxury real estate acquired by companies is not used for private purposes and if taxpayer support has been misused.

“If these cases are confirmed, we will ask that we make sure that taxes are paid correctly and state support is returned to the state budget,” says the MP.

The list is not public: the activities are not related

However, the public will not have the right to find out about companies assisted by jet skis, boats or yachts.

“The legislation does not allow the names of these companies to be disclosed. Like the companies that took advantage of taxpayer support and bought luxury cars. The lists that are presented in the public space have nothing to do with the lists to disposition of the STI, which were not made public ”, says M. Majauskas.

He gave some examples of what type of activity companies and what type of purchases they used.

The company, which is dedicated to the pet food trade, was recognized as a victim of the COVID-19 pandemic, received more than 20 thousand. Subsidy of euros for the preservation of employment and 17 thousand acquired. a jet ski that costs euros.

Another company dedicated to the repair of building engineering systems, recognized as a victim of the COVID-19 pandemic, received 30 thousand. 40 thousand euros in subsidies for the preservation of employment. support for business promotion and acquired 18 thousand euros. a jet ski that costs euros.

Another company that provides sewing services, also recognized as a victim of the COVID-19 pandemic, received 20,000 for downtime and maintenance of work. He acquired a luxury boat that cost hundreds of thousands of euros.

The company, dedicated to the extraction of gravel and clay, received 110 thousand. 22 thousand euros, acquired a business promotion grant. recreation boats.

“I leave it up to you to decide how it can be related to gravel or clay,” says M. Majauskas.

The company, which sells sanitary equipment, was also recognized as a victim, received 3,000. Subsidy in euros for micro-businesses. bought 14 thousand. a jet ski that costs euros.

Real estate agency, which received 4 thousand. EUR subsidy for micro-businesses, bought 34 thousand. a pleasure boat that costs euros.

The land freight transport company bought 15 thousand. a jet ski worth 1 thousand euros, although at that time he received 160 thousand euros from the state. 90 thousand euros in subsidies for the preservation of employment; euros for downtime.

Another international transport services company paid 14 thousand for a jet ski. EUR, at that time received from the state 80 thousand. EUR for the preservation of jobs and 170 thousand. euro for business promotion.

The company, which is dedicated to the repair of heavy equipment, also bought 14 thousand. a jet ski worth 60 thousand euros, while at the same time he received 60 thousand. Subsidies in euros for the preservation of employment.

The data is preliminary and is still being reviewed.

Inadequate state support conducted

M. Majauskas admitted that the fact that the state incorrectly distributed support to businesses last year may have contributed to this problem.

“A large number of EU countries have opted for a different type of distribution of support, not in the form of direct subsidies, but in the form of state guarantees, when the state guarantees commercial banks the services they provide,” compared M Majauskas.

In this way, banks, he said, became another filter, saving taxpayers money, and were only used if the credit company could no longer pay. The banks checked whether the company really needed the money or whether it would actually be used for its intended purpose.

“In this case, we didn’t have such a filter and often the money was donated to the company. (…) Looking back, perhaps it is easy to say that it was necessary to act in one way or another, at that time the Government decided to spend as much as possible and as soon as possible, and today we can partially see the consequences. ”, Says M. Majauskas.