Vice Minister of Economy and Innovation J. Rojaka: up to 67 thousand people should be supported. companies, money hit in January Business

This time, the support will not be distributed horizontally to all companies, but only to those most affected.

Initially it was announced that companies that met two criteria would be eligible for aid: turnover would be reduced by 30% and in the sector to which the company belongs, there would be around 40% of those companies affected.

However, at a press conference on Wednesday, the Deputy Minister of Economy and Innovation, Ekaterina Rojaka, stated that she believes that the second criterion should be abandoned because the calculation becomes too complicated and does not reveal the real situation. The application of the two criteria was also criticized by the heads of business associations.

“The latest statistics show that we can only deduce the drop in turnover for VAT taxpayers, which represents only a third of the companies on the market, so the current statistics are incomplete. We model on the basis of 2018, but based on 2020 statistics we do not have a complete picture. Therefore, the second criterion will not work ”, explained the deputy minister.

According to the Ministry, there are only 19 thousand VAT payers, whose turnover has fallen by 30%. And the total number of affected companies in Lithuania should be between 60 and 67 thousand.

After the introduction of the second quarantine in Lithuania, the activities of some companies were again suspended: catering establishments, sports clubs, SPA centers.

The Ministry of Economy and Innovation will focus this time on two measures: the intention is to resume the provision of soft loans to companies affected by COVID-19 and expand the circle of companies eligible for subsidies.

It is true that, unlike the first quarantine, when subsidies were distributed only to micro-enterprises with up to 9 employees, now a wider circle of companies will be able to receive this benefit. This measure will be key to supporting the business affected by the second quarantine.

Proposes to include indirectly affected companies

The Ministry of Economy and Innovation will present its proposal to abandon the second criterion in the allocation of support to the Government, which will finally have to decide how the support will be.

And the Ministry of Finance must provide funds for these measures.

The government will also consider whether only that 30 percent will be eligible for support. companies that have experienced a loss of business volume and have been included in the restricted activities list, or will be viewed more broadly.

The list of restricted activities is coordinated by the Ministry of Economy and Innovation (EIIM) together with the Ministry of Social Security and Labor and the Ministry of Finance.

However, J. Rojaka suggests not to be guided by the distribution of subsidies if the company has been included in the restricted activities list, since uninhibited but related businesses have also been affected.

“The indirect effects are as painful as the direct ones because the companies are connected. For example, the activity of travel agencies is not restricted, but tourists do not come, our residents do not leave, therefore the company does not have invoicing ”, said the vice minister.

The indirect effects are just as painful as the direct ones because companies are involved. For example, the activities of travel agencies are not restricted, but tourists do not come, our residents do not leave, so the company has no billing, – said the deputy minister.

J.Rojaka compared that if you follow the list of restricted activities and 30 percent. With the fall in turnover, the circle of beneficiaries will be reduced to 55 thousand. companies.

Green light awaits the Ministry of Finance

According to the Ministry, according to the selected criteria, between 100 and 200 million will be needed to pay the subsidies. euros. The amount of the grant will also depend on the funding allocated, whether it will reach 30% or 50%. Personal income tax paid by the company.

However, J. Rojaka emphasized that it is very important to obtain financing for this measure from the Ministry of Finance as soon as possible.

“We need very quickly (self-determination from the Ministry of Finance – 15 minutes), if we want to take the measure and apply it to the European Commission ”, stressed J. Rojaka.

Business support will have to wait, as the measures will have to be notified to the European Commission (EC). The ministry predicts that the funds will reach companies in the second week of January.

“The implementation of this measure will be postponed to next year, so funding is anticipated in 2021. We will do our homework so that the company receives invitations as soon as the year begins. If we could quickly reconcile with the EC by the end of this year, the money would reach the businesses in the first days of January. If there is approval at the government level, both the measure and the financing, “said J. Rojaka.

True, the Ministry of Finance, wary of additional costs, is in no rush to get funding for subsidies.

J. Rojaka admitted that the Ministry of Finance tends to talk about half of the requested amount that would be needed to pay the subsidies, around 100 million. euros. And while speaking of the need for financing for 2021, the deputy minister called for the involvement in the discussions and the new government.

Tighter loans – stricter conditions

Speaking of the second measure, soft loans for companies, J. Rojaka argued that this time the conditions could be tightened.

This year, 3.5 thousand people received soft loans. This measure was very popular during the first quarantine, with a budget of 200 million euros. euros.

“There is a clear requirement from the Ministry of Finance to adjust the assessment of loan repayment options. The stricter conditions reduce the number of companies that could benefit from soft loans,” said J. Rojaka.

I thought no additional funds would be needed

Acting Finance Minister Vilius Šapoka previously stated that no additional funds will be needed for the support measures, as the remaining unused funds from the spring were approved by the Economic Stimulus Plan.

“There are no additional funds, because we have an approved economic stimulus plan for this year, which exceeds 6 billion. in the form of direct grants, endorsements and others. That plan is not fully utilized. It is not necessary to contribute additional funds, these funds are provided ”, said the Minister.

He predicted that business promotion due to the introduction of the second quarantine will cost around tens of millions of euros.