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Govt announces measures to help businesses hit by Covid-19 restrictions

Johnny Bugeja

The Gibraltar Government yesterday announced measures to help businesses in the hospitality, leisure, distributive and catering sector that have been affected by the restrictions imposed by the in recent.

Last night, Chief Minister Fabian Picardo said the following measures would be in effect as from today.

Where the Government is the direct landlord of such businesses, the Government will waive all commercial rents for the second quarter of the calendar year 2020.

The Government does not presently have the legislative power to restrict the rents that can be charged across the board.

In line with the proposals the Government is applying to its own commercial premises, the Government seeks to encourage landlords to provide flexibility over the second quarter of the calendar year to affected businesses in such relevant sectors.

This is particularly the case given banks have provided flexibility on their interest payments to those financing the acquisition of commercial property.

In order to encourage similar behaviour from landlords, the Government is proposing the following :

- If the landlord does not waive at least 50% of the rent due in the second quarter of the calendar year for affected businesses in these sectors the Government will introduce legislation for the gross rent due for this second quarter, without deductions, to be taxed at 50%.

- In addition tenants who are required to pay this rent and are not afforded flexibility will be allowed a deduction against their tax liability of three times the amount of rent paid.

- Alternatively these provisions will not apply where the landlord agrees to defer the rent due in this second quarter of the calendar year by waiving this and extending the lease by a further three months.

The Government will waive all business rates for affected businesses in the relevant sectors for the second quarter of the calendar year 2020.

The Government will defer the business water and electricity charges for affected businesses in the relevant sector for the month of April and allow this to be paid evenly over the following 12-month period without applying any penalty.

This is in effect an interest free loan on this amount.

The Government is also asking telecommunications providers to consider a similar package of measures in respect of their affected customers in these sectors for this period.

The payment of salaries by affected businesses in these relevant sectors to employees will not attract any PAYE or employee or employer Social Insurance contributions for the month of April.

Employers in all other sectors will during the second quarter of this calendar year be allowed to defer their payments of PAYE and SI by eight weeks from the due date.

This effectively means that businesses can avail themselves of a deferral of 10 weeks after the month end during this second quarter of 2020.

Whether or not the incentives in relation to PAYE and Social Insurance should be extended further will be considered in consultation with the unions and the business representative organisations.

The reason for the Government taking these steps is specifically to allow private sector employers to continue to pay salaries to employees for as long as possible, Mr Picardo said.

A stock purchase scheme will be introduced whereby catering establishments can sell to the Government such perishable stock as they may hold which might spoil and which the Government can use in its own catering facilities.

Additionally, import duties are waived as from midnight last night until midnight on 30 April in respect of all classes of goods except for the tobacco, fuel and alcohol classes.

This waiver will be reviewed with the business representative organisations before the end of next month.

In order to allow companies in the eGaming and Financial Services Sectors to relocate staff from overseas to cover shortage of staff in Gibraltar thereby providing continuity of service, the Government will introduce a streamlined work permit and ETB process.

This will be available online to limit queuing and attendance at counters. Associated ETB fees in regard to these and all other applications to register employees in all sectors will be removed for the second quarter of this calendar year.

To assist entities licensed by the Financial Services Commission with cash flow, fees payable by them for the whole year in advance in April will not be payable in advance as a lump sum this year.

Such fees will instead this year be payable quarterly in advance this year.

More measures are under review by the Government, which will make more announcements as matters develop.

“We have the financial firepower at our disposal to be able to react and to assist even further depending on how matters develop in coming weeks and months,” Mr Picardo said.

“But we will not overreact at this early stage and we will retain the ability to assist as the spread of the virus progresses.”

“And also these measures will apply obviously to businesses that are in good standing at the end of the first quarter of the calendar year.”

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