In accordance with the announced state support to companies and self-employed workers who have been affected by the pandemic, the Financial Council is presented and with an announcement it highlights the two parameters of the plan.
First, he emphasizes, the support announced is targeted and explicit in terms of the number and characteristics of the beneficiaries. This approach gives predictability to the total expenditure that will be made, with the final amount expected to be announced when the analysis of the tax returns of the beneficiaries is completed.
Secondly, he notes that the utilization of the tax returns submitted by the beneficiaries in the third quarter of 2019 as the means of calculating the amount of support is extremely positive. This practice ensures a fair distribution of amounts based on objective criteria which reflect the extent to which the beneficiary has been affected.
The announcement of the Financial Council:
“The need to take measures that have a social character and which support employment in a critical period is understood.
The support announced by the Ministry of Finance to companies affected by the ongoing Pandemic crisis should be financially bearable and should not have a serious impact on public finances. At first glance, and in anticipation of the announcements for the final cost, it seems that this is true, with the cost being close to 3 million euros.
Although the side effects have not yet been calculated, these costs should also be considered as partly stimulating in relation to employment and general economic activity, albeit to a macroscopic degree.
However, two parameters of the plan are important to which special reference should be made:
- First, the support announced is targeted and explicit in terms of the number and characteristics of beneficiaries. This approach gives predictability to the total expenditure that will be made, with the final amount expected to be announced when the analysis of the tax returns of the beneficiaries is completed.
- Secondly, the utilization of the tax returns submitted by the beneficiaries in the third quarter of 2019 as the means of calculating the amount of support is extremely positive. This practice ensures a fair distribution of amounts based on objective criteria which reflect the extent to which the beneficiary has been affected.
In addition, this practice consolidates the tax return as an objective criterion for support and encourages the proper filing of tax returns in the future.
The practice of utilizing tax returns for the purposes of compensation, sponsorship or support is a best practice and should be adopted as universal in all cases of government expenditure related to business or household support.
“With this practice, the fair and objective distribution of such expenses is ensured, while the concealment of income from tax returns is substantially discouraged.”
