Cabinet: more predictability of the corona approach, no more generic corona support | news item

News item | 01-04-2022 | 16:15

The corona approach will become more predictable through the use of four scenarios that should keep society as open as possible. This requires a shared effort from citizens, government and business. The cabinet expects workers and entrepreneurs to be able to adapt to most corona measures. For possible new measures against corona, the cabinet therefore does not want to give generic government support again. Only in the worst scenario and if companies have to close completely and for a long time, will affected entrepreneurs receive targeted support. This is written by the Ministers of Economic Affairs and Climate, Social Affairs and Employment and Finance and the State Secretary for Taxation and the Tax and Customs Administration to the House of Representatives.

With the generic support and recovery package, the cabinet has helped workers and entrepreneurs get through the corona crisis over the past two years. To prevent the spread of corona, companies had to close their doors and parts of the economy were virtually silent. With the support package, the government offered security to companies, the self-employed and employees. Companies received financial support in the payment of wage costs and fixed costs. As a result, employment, economic activities, incomes have been preserved and bankruptcies have been prevented.

However, long periods of government support hamper economic dynamism, making the economy less equipped for the future. Also, the support does not always end up in the right place. In addition, in several cases, the support measures also compensate for loss of turnover that is not caused by contact-limiting measures. Finally, the expenditure on the support package (42.4 billion euros) is not financially sustainable in the longer term. Corona support has cost every household 5,000 euros so far. That is why the government wants to return to a normal balance for the distribution of risks between entrepreneurs and society.

Debt approach

Although the economy is improving, not all signals are green again for every entrepreneur. Despite the support packages, there are entrepreneurs and workers who have been hit hard by the crisis and have built up debt. Research shows that it is difficult to gain a good insight into the size and reason of the debts of entrepreneurs. The influx into debt counseling and the number of bankruptcies is not yet a cause for concern, but an increase in the number of bankruptcies and company closures is expected this year.

The outstanding tax debt amounted to more than 20 billion euros at the end of February 2022 at 278,000 companies. The cabinet supports these entrepreneurs with a favorable payment arrangement. For example, the accrued tax debt can be repaid in five years. Extended payment terms also apply to refunds in NOW, TVL and Tozo.

The Chamber of Commerce (KVK) is working together with MKB-NL, VNO/NCW, the Ministries of SZW and EZK to provide better information for entrepreneurs with debts. For entrepreneurs who are privately liable for business debts, there are possibilities to obtain debt assistance through the municipality. Entrepreneurs are also helped through the Homologation Underhands Agreement (WHOA) Act to reach an agreement with creditors and shareholders so that they can avoid a company bankruptcy. Entrepreneurs who make a new start via the WHOA can then make use of a so-called TOA credit. The government is also committed to making restructuring agreements more promising because the Tax and Customs Administration will temporarily be satisfied with a lower part of the debt as of 1 August 2022.

The cabinet is making every effort to find solutions for companies that were healthy in the core, but are not making progress due to corona debts, and also pay attention to possible future bottlenecks for these entrepreneurs.

Firstly, the government will monitor the effect of the debt approach. This is done on the basis of, among other things, the reports of the Chamber of Commerce. On a more individual level, there is the national case study table to arrive at solutions for distressing cases. These are entrepreneurs who have debts with various implementing organizations. In order to be able to control this, the government is appointing a booster for the debt approach. An internet consultation should further illustrate how entrepreneurs who have tax debts due to the corona crisis can be supported and where there are still bottlenecks.

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