Government approves short term measures to mitigate the COVID-19 impact on the national economy

Wed. 29 of July of 2020, 17:16h
Posse Dr. Rui

The Council of Ministers approved today, July 29th, 2020, a package of four short term measures to mitigate the impacts of the economic crisis resulting from the COVID-19 pandemic, proposed by the Commission for the elaboration of the Economic Recovery Plan, led by the former Minister of Finance, Rui Augusto Gomes.

Although the measures adopted by the Government, during the term of the State of Emergency, have contributed to secure jobs and support companies, as well as to keep consumption levels of employees and families, it is still necessary to keep or create new measures, in 2020, that allows to support the satisfaction the citizens basic needs, to keep the largest possible number of jobs and, thus, the incomes they generate, to support self-employed workers and all those who belong to sector commonly referred to as informal sector, either by their precarious nature of employment relationship, either due to the fact that they do not make contributions to the social security system and, ultimately, to keep as many companies on the market as possible.

The first of the measures to be adopted will be granting a “basic basket”, containing food items, which should offer the necessary nutrients, as well as cleaning and hygiene products, to all families in the country. The main goal of this measures is to support families in meeting basic needs, helping to fight hunger and greater vulnerabilities existing in some of the poorest and most isolated regions of the country, in addition to another objective, translated into support for farmers, producers and traders, in order to encourage local supply and to guarantee the flow of production.

The second measure consists on the creation of a monthly monetary subsidy for employers that resume their regular activity and, in particular, those whose activity is strongly related and dependent on tourism, such as the hospitality sector, the travel agencies and airlines companies, with the aim to help economic recovery, helping them to support the fixed costs, namely with wages, rent and taxes, or others, and to make necessary small investments for their activities. The amount of subsidy will be calculated, based on the estimated losses in turnover and on the number of employees.

The measure already adopted before, related to the payment waiver of the employer’s portion of the contribution for social security, will be expanded and reformulated, aiming that it could be put into practice during the next sixth months, increasing the employer’s liquidity, with the temporary elimination of costs with aforementioned contributions.

Whereas the precarious situation of self-employed workers and of all those who work in the informal sector, the fourth measure consists on the granting of an extraordinary subsidy, equivalent to 60% of the incidence value of the first step of optional membership, which is equivalent to the net value of US$ 33,60, to the referred workers, on the condition that they register as contributors to the social security system, between July and September 2020, and that they maintain the payment of the respective contributions during, at least, more three months, after the end of the subsidy, that is, until March 2021, aiming to support workers who are in a situation of total social unprotection.

In addition to this set of measures, the Commission will soon present its recommendations to the Council of Ministers, regarding the measures to be approved and implemented from 2021, aiming to national economic recovery.