articles | 27 April 2020

Coronavirus: Chamber of Commerce outlines measures to kickstart economy

The Cyprus Chamber of Commerce (Keve) on Sunday proposed a series of recommendations on supporting the economy to kickstart it back to life after the lockdown is gradually eased.

While praising the government’s actions in tackling the coronavirus crisis, Keve stressed that the focus should be on supporting business, securing people’s jobs, always while ensuring the health and safety of employees.

A key precondition to this is having the public service working, it said in a memo to President Nicos Anastasiades.

“The economy cannot restart, and businesses cannot operate smoothly if we do not ensure that all state services are fully operational, even with distance working of their employees, where possible,” the memo said.

Keve proposed six directions the state could take to stimulate local demand and reinforce business liquidity, allowing them to pay their staff and gradually reducing their dependence on emergency state benefits.

These include the immediate restart of government projects to stimulate the economy and speed up plans to offer incentives aimed at attracting capital and investment which will help government coffers.

Additionally, support should also be given to local industry, particularly in exporting Cypriot products with a proposal of funding to cover a portion of the cost in transporting goods, both industrial and agricultural with the focus on major markets such as London and Dubai. This also includes pharmaceutical products, the memorandum said.

In fact, Cyprus’ “excellent handling of the pandemic” along with the “extremely satisfactory results” should be showcased as part of measures aimed at creating a positive picture of the island internationally, Keve stressed.

Businesses should be supported in every possible legal way, the memorandum added, stating that other states will be doing the same to ensure their own businesses survive and remain competitive, and thus Cyprus should not shortchange their own. To this end, horizontal measures need to be taken, Keve added.

Businesses should have tax relief such as extending the loss transfer limitation period from five to 10 years, reinstate the measure of accelerated depreciation to encourage investments and suspend dividend distribution for a few years after a study is undertaken so that both the company liquidity and investment activity can be helped and encouraged.

Keve also called for a reduction of various taxes for as long as the crisis lasts, scrapping the defence contribution for rents and reducing or even scrapping tax on capital gains for a period of time.

As far as projects that are set to go to tender, Keve urged they are speeded up and suggested that the procedure for raising objections over tenders should be reviewed, with a high fee for appealing a decision as well as ensuring less time is taken between all the different stages.

It also called on the government to expedite the passport scheme whilst ensuring problems with Cyprus’ reputation are avoided.

Plans on digital transformations for businesses, the agricultural development programme for 2021-2027 and the scheme on boosting youth and female entrepreneurship should also be brought forward, Keve said.

“These plans are expected to be announced towards the end of 2021. Expediting them will enable the industries that want to carry out upgrades and investments to do so immediately since the state can cover up to 40 per cent of the eligible costs,” Keve said.

Source: Cyprus Mail

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