FinMin proposes moves to aid small businesses over Covid-19

The Czech Finance Ministry will seek to lessen the impacts of the coronavirus outbreak on small businesses and individuals by waiving fines for not submitting the individual income tax return on time or failing to submit the VAT ledger statement, among others, the Finance Ministry said.

The ministry is likely to postpone the deadline for all tax returns to July 1, according to a package of measures published on its website today. The measure mainly seeks to reduce the number of people visiting tax offices, the ministry said. The package is currently being debated with representatives of businesses and professional organisations, ministry spokesman Michal Zurovec said.

The launch of the third and fourth stages of electronic sales registration (EET) scheduled for May 1 cannot, however, be delayed due to the applicable legislation, the ministry said. If businesses are unable to fully prepare for EET due to the novel coronavirus outbreak, financial and customs authorities will treat any deficiencies with sensitivity and consideration, it added.

Any measures proposed by individual ministries need to be approved by the cabinet first as the government declared a state of emergency over the coronavirus outbreak earlier today. Some banks will introduce a three-month deferment of mortgage and consumer loan payments for citizens and small entrepreneurs hit by the spread of the novel coronavirus, the Czech Banking Association (CBA) said today, adding that clients will be informed of the details by their respective banks.

A CTK poll among Czech banks has shown that Ceska sporitelna will enable the deferment while Raiffeisenbank will assess each case individually. CSOB will comply with the CBA's decision but is still discussing the details. Air Bank is currently not considering the deferment option. The Czech Chamber of Commerce has called on the government to enable firms hit by the state of emergency to have immediate access to interest-free loans of as little as Kc50,000, with repayments deferred for at least a year, the chamber told CTK in a press release today.

On Monday, the government decided that businesses affected by the novel coronavirus may apply for interest-free loans of Kc0.5m and more. The government has so far set aside Kc600m for them. Businesses may apply for the funds from April via Czech guarantee and development bank CMZRB. The loans are to be repaid in two years, with instalments deferred for one year.

More than 30 percent of Czech manufacturing firms are experiencing difficulties due to the spread of the novel coronavirus, according to a survey conducted by the Confederation of Industry of the Czech Republic among 347 manufacturing firms. More than 30 percent of firms register employees in quarantine and roughly 40 percent are experiencing or expecting delivery issues, the survey shows.

About 36 percent are dealing with transport and logistics complications and 20 percent could face cash flow issues. Some 35 percent of firms have seen or will see cancellations of orders and drop in demand.

The Czech advertising industry will register losses in the lower hundreds of millions of Czech crowns due to cancellations of orders, said Association of Communication Agencies (AKA) head Marek Hlavica. The government's measures relating to the declaration of a state of emergency in Czechia will also affect the country's small international airports as commercial cross-border flights may only be handled by Vaclav Havel Airport Prague from Saturday.

Czech air carriers Smartwings and Czech Airlines (CSA) will make it possible to change booking dates for all flight tickets until the end of June free of charge, the air carriers' spokeswoman Vladimira Dufkova told CTK today. Kiwi.com, a Czech air ticket seller with global operations, is currently posting half of its regular sales and has not seen a drop only in South America. The firm expects to be posting zero sales from early April for one or to months, said Kiwi.com's founder and CEO Oliver Dlouhy. In 2018, the firm generated sales of Kc28bn and continued growing.

The 30-day ban on all flights from Europe to the USA will not affect the Prague airport's operations as direct flights from Prague to the USA are seasonal and not scheduled until May, the airport's spokesman Roman Pacvon told CTK. Representatives of global transport companies agreed at a Global Passenger Network meeting held in Prague that bus operators will suffer significant financial losses due to the novel coronavirus situation and governments should compensate them if the crisis is long-term, the organisation's head Agnes Pastuzsak told CTK today.

Source: ČTK