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Minister for Financial Markets and Consumer Affairs
Per Bolund has changed areas of responsibility. From 5 February 2019 he is the Minister for Environment and Climate, and Deputy Prime Minister.
Minister for Financial Markets and Housing, Deputy Minister for Finance.
Per Bolund is Minister for Environment and Climate and Deputy Prime Minister from February 5, 2021.
Crisis package for small enterprises in Sweden
The Government is now presenting additional measures to mitigate the economic impact of the COVID-19 virus outbreak. The proposals are based on an agreement between the Swedish Social Democratic Party, the Centre Party, the Liberal Party and the Green Party.
To mitigate the impact on the Swedish economy, a crisis package for businesses and jobs, and several other measures, was presented earlier. To particularly alleviate the impact for small and medium-sized enterprises, a crisis package is now being presented for Swedish entrepreneurs.
Central government emergency package for affected small and medium-sized companies to be established
A central government loan guarantee has been proposed to make it easier for companies to access financing. The proposal means that the central government will guarantee 70 per cent of new loans banks provide to companies that are experiencing financial difficulty due to the COVID-19 virus but that are otherwise robust. The guarantee will be issued to banks, which in turn will provide guaranteed loans to companies.
The loan guarantee primarily targets small and medium-sized enterprises. However, there is no formal limit on company size to take part in the programme. The Government expects that the guaranteed loans will not be used for bonuses or variable remuneration to senior officers of the company, or for profit withdrawals other than what is comparable to a regular salary withdrawal.
The Swedish National Debt Office will administer the guarantee and it is proposed that each company be allowed to loan up to SEK 75 million, although exceptions can be made. The banks will pay a guarantee fee to the Swedish National Debt Office for guarantees that are issued. The fee will be determined on the basis of the borrower’s actual risk class, which is set by the credit institution. The risk assessment will be carried out in accordance with the credit institution’s credit assessment process.
If a credit guarantee has to be redeemed, the central government will pay the guaranteed loan amount, which will impair the central government budget balance and net lending. The guarantee fees that will be charged mean that the central government budget balance and net lending will be slightly improved. It is very difficult to assess the situation, but overall the guarantee system is expected to be self-financed in the long term.
The loan guarantees should be provided as soon as possible; this is why the Government is preparing the proposal tomorrow for prompt consideration by the Riksdag. The European Commission is also prepared for rapid consideration and approval.
Enterprises can apply for a loan with a government credit guarantee by contacting a bank.
Temporary reduction of employers’ social security contributions and individual contributions
A temporary reduction of employers’ social security contributions will be proposed for the period 1 March to 30 June 2020 so that only the old age pension contribution is paid. It is proposed that this reduction should apply to up to 30 employees and on that portion of the employee’s wage that does not exceed SEK 25 000 per month. This entails tax relief of up to SEK 5 300 per employee and month. To provide equivalent relief to sole traders, a reduction of individual contributions is also proposed. The proposal’s cost to public finances are estimated to SEK 33 billion.
Temporary discount for rental costs in vulnerable sectors
To reduce costs for companies with considerable difficulties as a result of the COVID-19 virus – in sectors such as durable consumer goods, hotels, restaurants and certain other activities – the Government proposes providing support that aims to facilitate and speed up renegotiation of rents. The approach is that central government will cover 50 per cent of the rental reduction up to 50 per cent of the fixed rent.
The support can be applied for after the fact and will apply for the period 1 April until 30 June 2020. SEK 5 billion is being allocated for this.
Measures targeting small enterprises
A future proposal is that the rules for tax allocation reserves will be temporarily changed so that sole proprietors severely affected by the COVID-19 outbreak will receive tax cuts. The new rules mean that 100 per cent of the taxable profits for 2019, up to SEK 1 million, can be set aside in the tax allocation reserve, which can then be set off against possible future losses. This means that many people can get back the preliminary tax they paid in 2019. This proposal concerns sole traders and natural persons who are partners in Swedish partnerships. The proposal is expected to result in a maximum liquidity reinforcement of more than SEK 13 SEK billion.
Moreover, the previously presented proposal on new opportunities to defer tax payments will be expanded. This means that value added tax reported annually from 27 December 2019 until 17 January 2021 will also be covered by the proposal. In this way, many sole proprietors can defer their VAT payments that otherwise should be paid during the spring, such as on 12 May. Depending on how the situation develops, the proposal can encompass more than SEK 7 billion if the entire liquidity reinforcement is used.
Companies that are made dormant in the case of unemployment are exempted in 2020 from the rule that a company can only be made dormant once during a five-year period.
The proposal will be presented to the Riksdag shortly in an additional amending budget.
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 73 074 05 57
email to Mirjam Kontio
Press Secretary, Centre Party
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Head of Press Service, Liberal Party
Mobile +46 70 298 67 90
Press Secretary to the Minister for Financial Markets and Housing Per Bolund
Phone (switchboard) +46 8 405 10 00