Two new support programmes to boost employment for exporting and tourism companies in order to overcome the consequences of the Covid-19 crisis were approved at the special meeting of the Cabinet of Ministers on July 14.
“In the government, we are still evaluating that the requirements for restricting the Covid-19 virus are in balance with the economic ones and entrepreneurs could safely continue their operations. Although economic activity is increasing following the partial cancellation of the Covid-19 restrictions, some companies are still unable to resume full capacity, resulting in difficulties in keeping employees due to partial downtime. Similarly, some companies still have cash flows and supply chain disruptions, deferred settlements and a lack of working capital. The Ministry of Economics therefore offers two new aid programmes for exporting and tourism companies affected by the crisis. As part of the aid programmes, these companies will be able to receive a one-off grant or donation from the state, the size of which will depend on the amount of taxes paid. The state aid is intended to compensate for employees’ wages. Businesses will be able to apply for support after the aid programmes are harmonised with the European Commission – provisionally at the end of this July,” emphasises the Minister of Economics Jānis Vitenbergs.
The total funding of support programmes is 70,2 million euro, including 51 million euro for aid to exporting companies and 19.2 million euro for aid to tour operators. The two programmes are expected to support around 7500 companies and 78,000 employees.
Aid programmes will be administered by the Latvian Investment and Development Agency (IDAL). Following the harmonisation of the aid programmes with the European Commission, IDAL will be informed of the procedures and deadlines for submitting applications.
Companies will be able to apply for the aid by this September 30 by submitting an electronically signed application to IDAL (IDAL will develop a single application form to reduce the administrative burden). Upon receipt of the application, IDAL will evaluate the information specified therein, take a decision on the granting of the aid and pay the aid to the company’s account. IDAL will publish the list of the undertakings that have received the aid on its website and will send it to the State Revenue Service. Following the provision of the aid, IDAL will carry out post-monitoring of the use of the aid.
Aid to exporting companies
Those exporting companies will be able to apply for aid:
- whose exports of goods and services amounted to at least 1 million euro in 2019;
- whose revenues from the economic activity under the influence of the Covid-19 crisis in one month during the period from April to June 2020, compared to the month in question in 2019, have decreased by 20%;
- in 2019, the average monthly gross salary paid to employees for whom mandatory state social insurance contributions have been paid is not less than 800 euro;
- which on the date of submission of the application do not have a debt of taxes (duties) administered by the State Revenue Service, which in total exceeds 1000 euro, except for tax payments, for which an extension of the term of payment has been granted, an agreement regarding voluntary tax payment has been entered into or an agreement has been entered into.
The economic operator will receive the aid – a one-off grant or donation for compensation of wages in the amount of 25% of the mandatory state social insurance contributions paid in 2019, but not more than 800,000 EUR. The amount of aid will be received by the economic operator in one payment.
Aid for businesses in the tourism sector
Those tourism sector companies will be able to apply for aid:
- which by 1 March 2020 have registered their type of activity in accordance with the following NACE codes:
5510 Hotels and similar accommodation,
5520 Holiday and other short-stay accommodation,
5530 Camping grounds, recreational vehicle parks and trailer parks,
5590 Other accommodation;
5610 Restaurants and mobile food service activities,
5621 Event catering activities,
5629 Other food service activities,
5630 Beverage serving activities,
7739 Rental and leasing of other machinery, equipment and tangible goods n.e.c.,
7490 Other professional, scientific and technical activities n.e.c.,
7911 Travel agency activities,
7912 Tour operator activities,
7990 Other reservation service and related activities,
8230 Organisation of conventions and trade shows,
9004 Operation of arts facilities
9321 Activities of amusement parks and theme parks,
9329 Other amusement and recreation activities;
- whose revenues from the economic activity under the influence of the Covid-19 crisis in one month during the period from April to June 2020, compared to the month in question in 2019, have decreased by 30%;
- which on the date of submission of the application do not have a debt of taxes (duties) administered by the State Revenue Service, which in total exceeds 1000 euro, except for tax payments, for which an extension of the term of payment has been granted, an agreement regarding voluntary tax payment has been entered into or an agreement has been entered into.
The economic operator will receive the aid – a one-off grant or donation for compensation of wages in the amount of 30% of the mandatory state social insurance contributions paid in 2019, but not more than 800,000 EUR. The amount of aid will be received by the economic operator in one payment.