State to offer support to businesses during crisis

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During the Covid–19 outbreak, the Latvian government plans to offer far-reaching support to businesses.

The state says it will cover costs associated with sick leaves and, in some industries, employees will be compensated for downtime for up to 75% of their monthly wage with payouts capped at €700 per month. Some industries will likewise be offered tax holidays, as well as loans and loan guarantees.

The Finance Ministry confirmed this March 17. 

The loan support program will be ensured by the Development Finance Institution Altum. Companies will be able to apply at the State Revenue Service to postpone tax payments for up to three years (which can be extended for one year already now, by addressing the State Revenue Service).

"We are unceasingly continuing analysis and discussing other possible ways of support so that the economic environment would remain as functioning as possible and help it fully recover and return to normal as soon as possible," said Finance Minister Jānis Reirs.

Funding for sick leaves and downtime compensations is to be taken from the state special budget. 

There is still uncertainty over the initiative as part of it should be harmonized with the European Commission. Likewise companies will be able to get faster VAT rebates and skip income tax advance payments. 

Only companies affected by the disruptive virus can apply for the initiatives mentioned. 

Meanwhile LETA reports that the largest banks, such as Swedbank, Luminor and SEB, are to offer mortgage holidays for private customers and suspending loan payments for business customers if their financial situation has been affected by the virus outbreak. 

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