Background information

The scope of the measure is to provide financial support to certain categories of businesses and self-employed persons that are not registered in the VAT registry and have been negatively affected by the pandemic and the measures taken by the government against the spread of COVID-19 in the community. The financial support provides the covering of running or operational costs of businesses such as rentals of business units, debts instalments or other business operational costs. The scheme is approved by the Cabinet in January 2021 and regulated by the Ministry of Finance.

Content of measure

Beneficiaries of the scheme are businesses and self-employed persons that are not registered in the VAT registry because the value of their annual taxable transaction is less than €15,600 and have been negatively affected by the pandemic. The scheme covers the following establishments:

• Registered Private institutes (i.e., language schools), according to the ‘Private Schools and Private Institute Law’ (1971)
• Dancing schools
• Conservatories/music schools, and
• Other agencies with similar activities.

The beneficiaries of the scheme will receive a sponsorship equal of the 50% of the monthly allowance that they receive from the Special Scheme of Certain Categories of Self-employed of the Ministry of Labour, Welfare and Social Insurance.

Use of measure

Currently, there is no information on the number of establishments eligible to receive the sponsorship or the effectiveness of the measure.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	SMEs Other businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Trade unions Employers' organisations	European Funds National funds National Recovery and Resilience Facility

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Consultation through tripartite or bipartite social dialogue bodies	Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

The sponsorship scheme actually emerged after the reactions of social partners – trade unions, employers’ organization, SMEs – and political parties at a national level to earlier measures of the government directed to businesses, which were considered inadequate. The covering of operational costs of businesses was a demand of social partners since the first wave of the pandemic in 2020, which influenced a public debate among them and the government. Social partners at the peak level participated in the designing phase of the scheme thought the implementation and monitoring is regulated by the Ministry of Finance.

Views and reactions

Social partners appeared satisfied upon the announcement of the scheme by the Ministry of Finance. Some reactions have been also observed mainly by the leading opposition party suggesting that the rental of businesses units, particularly for SMEs that have negatively affected by the pandemic, which represents a large percentage of the operational costs of businesses should be subsidised separately and directly by the government.

Sources

• 01 February 2021: Έναρξη καταβολής κρατικής χορηγίας σε επιχειρήσεις και αυτοτελώς εργαζομένους (mof.gov.cy)
• 07 April 2021: Το ΑΚΕΛ εντείνει την πίεσή του προς την κυβέρνηση για τα ενοίκια (dialogos.com.cy)