About two weeks after delivering the 2021 State Budget proposal to Parliament and in Brussels the outline of the recovery and resilience plan, the Government is announcing, with the dropper, some of the measures that will appear in the documents. And he took advantage of the Tourism Summit to launch four. One of the most awaited by employers’ associations – especially from the most affected sectors, such as tourism or restaurants – has to do with the simplified layoff substitute.
Companies with greater activity losses will be able to suspend employment contracts for a certain period of time and not only reduce them, as it currently provides support for the progressive recovery. It is because the Executive recognizes that the recovery was not as intense as expected and there are sectors that maintain “very significant” breaks where demand is so low that there is no reason to reduce hours.
To stimulate consumption, the Government is also designing a way for tourism, catering, transport and culture customers to recover, in future purchases, part of the VAT they paid for purchases in these sectors. And in catering, accommodation, transport and culture, you will participate in the discounts made to customers. There will also be a new line of support for the entertainment sector and event organization.
The Government will review the regime of support for the progressive recovery, the simplified layoff substitute, allowing the suspension of employment contracts (and not just the reduction of hours, as the regime has hitherto predicted) in the companies most affected by the pandemic.
The Minister of Economy, Pedro Siza Vieira, explained this Monday that, when the measure was initially formulated, the Government had a resumption “more intense during the summer, of demand directed to tourism”. “We have to recognize that this has not happened,” he said. Therefore, he announced that the Executive will review the regime of support for the progressive recovery.
“The regime was based on the idea that workers would have some necessary occupation due to less demand,” he said. However, “there are sectors and companies with very significant declines, where the demand that justifies partial occupation does not exist”. The regime will be made more flexible “so that companies with more significant losses can have a total reduction in their work capacity”, he explained. Pedro Siza Vieira did not specify the break in billing necessary to join the support.
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In addition, companies in the tourism sector will be able to continue to be exempt from paying the single social tax (TSU) beyond September. The rules currently in force provide for an exemption regime depending on the size of the company, but only on the salary paid to workers for hours not worked. In August and September, micro, small and medium-sized companies are exempt on the employer side, while large companies have a 50% discount. In October, November and December, only micro, small and medium-sized companies are exempt from paying 50% of TSU.
Pedro Siza Vieira also said that the “Government is aware” that the regime of support for the progressive recovery currently in force, scheduled for the end of the year, will “most likely have to be extended during the next year”. “This is what the Government is preparing to do.”
Support for the progressive recovery has replaced the simplified layoff – which, in turn, remains for companies that are required by law to be closed or for those that have not reached the limit for renewals. The regime currently in force provides that companies with billing losses between 40% and 60% may, between August and September, reduce a worker’s hours up to a maximum of 50% and, from October, up to a maximum of 40 %.
If they have breakages in billing equal to or greater than 60%, they can reduce the worker’s schedule by 70% and, from October, by 60%. The employer’s charges go up in light of the simplified layoff: companies pay 100% the number of hours the employee works and the State continues to reimburse the number of hours not worked. The most affected companies, with breaks above 75%, are still entitled to extra support, in which Social Security participates in 35% of the period related to hours worked.
Tourism, catering, transport and culture customers will be able to recover part of the VAT they paid for purchases in these sectors in future purchases.
First, António Costa announced the measure. Hours later, Pedro Siza Vieira gave more details. If the Prime Minister had spoken only in the sectors of tourism and catering, the Minister of Economy added that the measure will extend to transport and culture.
Tourism and restaurant customers will recover part of VAT on new purchases in these sectors
“In the proposed State Budget law for next year, the Government will propose a formula for recovering the VAT borne by consumers in the tourism, catering, culture, transport sector, in order to be able to induce demand that does not exist, or not exist otherwise, ”said Pedro Siza Vieira.
The minister did not reveal how the VAT refund will be made – if it will be, for example, through a voucher or discounts (as in the United Kingdom, where the Government offered 50% discounts on meals in cafes and restaurants).
The measure was announced by the Minister of Economy and is effective as of October 5. It is a “scheme according to” with the accommodation, catering, tourist entertainment, culture and transport sectors that will allow economic operators that offer discounts to customers – “in amounts that are tabled” – to benefit from ” a public share of the value of this discount ”.
The measure “will allow our fellow citizens to have a more intense access to all that the sector has to offer, with a public contribution, which will reduce the cost to the citizen, is a way of stimulating the internal demand that we need to develop”, he stressed the guardianship minister.
Pedro Siza Vieira also announced that a line of support will be launched for the sector of the organization of events and shows – which will complement the lost revenue due to the rule of maximum capacity.
“At this moment, the organization of a spectacle event is something that sees its revenue potential inhibited by the simple circumstance that the sanitary rules prevent us from having the capacity of a occupied room”, Pedro Siza Vieira started, when announcing the measure.
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“The costs of an event may not be fully recovered by revenue”, so the program will allow “event producers to see the revenue they were able to collect from the events they promote” complemented to allow “compose the revenue” and “ balance the accounts of the events ”.
These measures “to stimulate demand are important for the coming months, which will be a decline in external demand and consumer inhibition”.
“We know that these are going to be difficult times, in which many entrepreneurs will have to make complex choices, maintain productive potential, preserve employment as much as possible, be able to endure these months until the next season or not,” concluded the minister.