Factsheet for case CY-2021-1/1831 – measures in Cyprus
|Country||Cyprus , applies nationwide|
|Time period||Open ended, started on 01 January 2021|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Direct subsidies (full or partial)
|Author||Loucas Antoniou (INEK) and Eurofound|
|Case created||09 April 2021 (updated 05 May 2021)|
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 coronavirus 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.
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:
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 Insurances.
Currently, there is no information on the number of establishments eligible to receive the sponsorship or the effectiveness of the measure.
|Does not apply to workers||
|Does not apply to citizens|
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|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:
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.
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.
Eurofound (2021), State sponsorship scheme for certain categories of non-VAT registered businesses and self-employed persons , case CY-2021-1/1831 (measures in Cyprus), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.