2020.03.15 09:18

Lithuanian government pledges tax breaks and economic stimulus package in wake of coronavirus quarantine

BNS2020.03.15 09:18

The Lithuanian government has vowed to enact an economic stimulus and business assistance plan on Monday as the country goes into quarantine over the coronavirus.

At a Cabinet sitting on Saturday, Finance Minister Vilius Šapoka said resources will be allocated for healthcare, employment promotion and social guarantees, as well as ensuring business liquidity and promoting the economy.

Read more: Lithuania calls nationwide quarantine: shutting non-essential shops and closing border to foreigners

“The situation is exceptional, and the economic response must be decisive and unprecedented,” Šapoka said during the Cabinet sitting.

The needs of the healthcare system to cope with the anti-epidemic effort will be funded from the state and government reserve, he said, and also by borrowing and using the funds of the mandatory health insurance reserve.

The government also pledges subsidies to businesses and the possibility to use the long-term unemployment fund.

“We will apply the principle of solidarity and will share this burden with the business sector,” the minister said.

Moreover, businesses will be allowed to postpone tax payments, and recoveries will be suspended and the possibility will be provided to be exempt from paying the land and real estate tax. The government also pledges to provide guarantees for working capital loans and partial interest compensation.

The government also vows to take measures to stimulate the economy by, first, redistributing funds slated for already planned projects.

“The climate change fund will be ‘thawed’, the road fund will be ‘thawed’ and additional investments will go to renovation, renewable energy and other infrastructure measures,” Šapoka said.

The government plans to up borrowing and guarantee caps on Monday to be able to implement this plan.

“We will need the Seimas' approval here, but I think nobody will have any doubt that these measures are necessary,” the finance minister said.

Prime Minister Saulius Skvernelis said these measures would be approved during the Cabinet's sitting on Monday. “It will be approved at 10:00 on Monday during the Cabinet sitting,” he said.

The prime minister said earlier that the stimulus measures would amount to “at least 1 billion euros”.

The Lithuanian government decided on Saturday to introduce quarantine to slow the spread of the coronavirus.

Once the two-week quarantine is in place on Monday, the country's borders will be closed to most foreigners. Shops, except those selling food and drugs, will be closed.

The ban will not apply to the movement of goods.

Most popular