Saturday, 31 October 2020

20 changes that the Government applied to help companies and people against the coronavirus

A tax moratorium, freezing water cuts, cutting electricity payments and realigning debts with banks are part of the actions of the government to maintain the country's economy alive

With a clear focus on defending employment and freeing up money so that companies and individuals have a “cash flow” in the coming days, dulled by the uncertainty caused by the coronavirus in the economy, the Government has so far added 20 actions aimed at giving it a push.

Without questioning whether the measures are effective or not, the Q, in conjunction with El Financiero, offers a summary of the changes and new options.

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These actions seek to mitigate the impact of COVID-19 on the different economic activities of the country and add to the restrictions and prohibitions on social isolation that aim to reduce the growth rate of infections so as not to compromise the capacity of the health system.

  1. About 12,000 commercial and industrial clients of the Instituto Costarricense de Electricidad (ICE) – State power company – will pay half of the consumption during March, April and May, the remaining 50% will be paid in equal installments between July and December of this year.  Does not apply to residential clients.

    The Empresa de Servicios Públicos de Heredia (ESPH) is waiting for negotiations with ICE to define how this benefit will be applied to its customers.

  2. The Instituto Costarricense de Acueductos y Alcantarillados (AyA) – State water and sewer utility –  and all other providers of the drinking water service will not apply suspensions or cuts in service for the next 60 days, with the possibility of extending the measure if necessary.

    It applies to all residential, preferential and commercial clients regardless of whether they are in default or in non-payment.

  3. Impuesto al Valor Agregado (IVA) Value Added Tax (VAT) –  the payment of this tax will be postponed for three months (April, May and June), but the amount of those months must be re-paid before December 31, 2020. Consumers will continue paying the VAT on the final prices of the goods and services they buy in those periods.
  4. Renta (Income tax): Partial payments of income tax are eliminated (which work as advances of the tax).

    For practical purposes, the partial payment of March 2020 was canceled and applies only to two groups of taxpayers: Those whose tax period expired on the last day of October, November or December 2019; To whom the fiscal period expired on the last day of July, August or September 2019.

  5. Selectivo de consumo: this tax is applied to products such as imported beers, grapes, spirits, tobacco and other products of a different nature. Like VAT, payment will be deferred from April, May and June and will be payable before December 31 of this year.
  6. Import tariffs: a moratorium will be applied when importing products for companies registered as taxpayers in the Single Tax Registry of the General Directorate of Taxation (DGT). Applies for the nationalization of merchandise that runs in April, May and June.
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  7. 75% reduction in the Minimum Tax Base (BMC) for three months. The BMC for health insurance will drop from ¢294,619 to ¢73,654 while the BMC for pension insurance went from ¢275,759 to ¢68,639. It will have an impact on the invoicing of employer payrolls, contributions of independent workers and public employees.

     

  8. Allow payment of fees per day actually worked.

     

  9. Make deferred payments of fees.

     

  10. Set differentiated quotas for independent workers to avoid double collection from employer and employee.
  11. Make adjustments to repayment agreements more flexible so that those who use this figure do not fall behind.
  12. Reduce interest rates for payment agreements until August 31.

     

  13. Postpone collection efforts to employers and independent workers until June 30 of this year. The institution will not close the business due to late payment.
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  14. Creation of a preferential rate (reduction in the rate) for occupational risk insurance held by companies with less than 30 employees.

     

  15. Travel insurance so that foreigners who get COVID-19 are treated within the country.
  16. Definition of accidents due to work risks to include the coronavirus with the aim of not affecting companies individually and to be able to charge the expenses of this disease throughout the line of this type of insurance.

     

  17. Reduction of working hours by up to 50%, allows companies that report a 20% year-on-year drop in their gross income to execute reductions in the working hours of their employees to preserve jobs. It can be applied during April, May and June, but with the possibility of extending it for three more months.

    The working hours and wages of workers may also be reduced by up to 75% if their contraction in gross earnings is 60% or more compared to the results of a year earlier.

     

  18. Streamlining the processes of temporary suspension of employment contracts so that companies that report reductions of at least 20% in the year-on-year comparison can stop their operation and send workers home until the situation improves. This measure does not interrupt the employment relationship, but neither does it imply the payment of wages during the suspension.

     

  19. All public and private banks in the country will apply the presidential directive to readjust loans to people affected by the economic impact caused by COVID-19.

    – Non-payment of next installments of mortgage, pledge, personal and leasing loans, the corresponding amounts will be transferred to the final balance.

    – No payment of the next two installments of the minimum payment of credit cards, amounts will be transferred to the final balance.

    – Study and adjustment of debts for business clients, SMEs and people affected by the impact of the virus on different economic activities.

     

  20. A reduction in the Monetary Policy Rate (TPM) applied by the Central Bank of Costa Rica (BCCR).

 

 

 

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Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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