The Macao SAR Government has rolled out a string of financial support initiatives to counter the economic effects of COVID-19. Secretary for Economy and Finance Lei Wai Nong announced on 13 February a package of measures to relieve the economic impact of the COVID-19 pandemic on Macao people and businesses – especially small- and medium-sized enterprises (SMEs). On 8 April, the Secretary for Economy and Finance announced the details of a second wave of help to boost financial support to the community.
Tax breaks in first package of support
The first package of measures announced by Lei Wai Nong, which will cost the Government an estimated total of MOP20 billion, includes the deduction from the tax liabilities of businesses of any profit tax otherwise payable for 2019, up to a maximum limit of MOP300,000. The measure is expected to help 2,970 companies.
The Macao Government will give a rebate of 70 percent on personal income tax for fiscal year 2018 paid by any Macao resident liable to pay the tax. The ceiling of the rebate will be raised to MOP20,000. The measure is forecast to benefit 170,000 workers.
The authorities will raise the threshold for the payment of salary tax for 2020 to 30 percent of an employee’s pay from 25 percent. About 180,000 employees in Macao are expected to benefit.
The payment of property tax on housing belonging to Macao residents in 2019 has been waived. This measure covers about 180,000 dwellings. The authorities will also partially reduce – by 25 percent – the payment of property tax levied on commercial establishments, so giving relief to about 25,000 establishments.
For six months, starting from April, the Government will waive the tourism tax payable by establishments providing services to visitors, which is charged at the rate of 5 percent. This measure covers 854 establishments, including hotels, bars, gyms and karaoke parlours.
Other tax benefits announced by the Secretary for Economy and Finance in February include rebates of the vehicle circulation tax on commercial vehicles, and waivers or rebates of fees and stamp duty charged in 2020 for the issuance of licences. Businesses can count as deductions for tax purposes any donations they make in cash or kind to any government body, charity or similar institution in Macao or Mainland China for the purpose of countering the COVID-19 pandemic.
Support for SMEs
The economic relief measures announced by the Macao SAR Government include support for SMEs in the city.
Among the provisional arrangements is a plan to subsidise the interest paid by SMEs, a move meant to help businesses resume trading after the coronavirus pandemic. Eligible businesses will receive subsidies for the interest charged on bank loans with interest rates of up to 4 percent. The maximum subsidy payable is MOP2 million a business, for up to three years. The arrangements came into effect in March. The Government has set aside MOP10 billion to fund the plan and is taking applications for the subsidies until 17 September.
The Government has eased the requirements for eligibility for the SME Aid Scheme. SMEs that have been in business for at least one year will be eligible until 10 September to borrow up to MOP600,000, interest-free, with a maximum repayment term of eight years. Previously only enterprises that had been in business for at least two years were eligible.
The Government will subsidise for three months all electricity and water used by Macao businesses, including shops. The subsidies for water charges are capped at MOP3,000 a month and those for electricity are capped at MOP10,000 a month, for each real estate unit used by a business. The subsidies for water began in May and those for electricity began in March. Casinos, hotels with three or more stars and Government-run facilities are ineligible.
As announced in February, the Government will offer every Macao resident an electronic voucher worth MOP3,000 to be spent within three months in restaurants, shops selling day-to-day necessities or in other establishments in Macao. The vouchers cannot be used to settle utility bills, or to pay for transport across the border, fuel, healthcare, outbound tourism services, or goods and services sold by casinos, pawnshops, banks, insurers or other financial institutions.
The purpose of the MOP2.2-billion electronic voucher programme is to spur domestic consumption and boost the economy. Macao residents had until 8 April to request a voucher, which takes the form of an electronic card. The cards were distributed between 14 April and 30 April. The MOP3,000 value can be used to make payments from 1 May until 31 July at the maximum rate of MOP300 a day. By the end of the second day of receiving voucher requests, the Government had received applications from more than 482,000 people.
The electronic cards can be used to make payments at Macau Pass terminals. Businesses that can accept the cards but that are unconnected to the Macau Pass electronic payment system are being offered access to the system free of charge.
Other support measures
Measures to support Macao people also include the distribution this year of a second voucher worth MOP600 to each permanent resident to cover spending on their personal health.
The Government will subsidise for three months all household consumption by Macao residents of electricity and water. The subsidies began in March and are payable to 220,000 households. The Government forecasts that it will spend MOP240 million in electricity subsidies and MOP55 million for water subsidies.
The Government will give families subsidised by the Social Welfare Bureau an extra two months’ worth of support.
The authorities intend to improve vocational training for Macao workers to help them take job opportunities created by greater Government investment in small or medium infrastructure projects.
The Labour Affairs Bureau introduced in March a subsidised programme of training for various vocations for 2,000 people. The training is meant for unemployed residents of Macao, for workers in the tourism industry such as tour guides, taxi drivers and coach drivers, and for workers in the meetings and exhibitions industry. In the first phase of the programme, 300 places are available in 7 courses of instruction in skills useful in the construction and building maintenance industries. On completion of a course, each trainee is eligible for a subsidy of up to MOP6,656. Later phases of the programme will offer courses of training in the food and beverage, transport and retailing industries.
Before the announcement of the first package of relief measures on 13 February, the Macao SAR Government had already taken steps to ease the economic pressure that the COVID-19 episode is putting on people and businesses in the city.
In February, the authorities began waiving for three months the rents that Macao businesses pay for publicly-owned property. The authorities have asked private landlords to consider reviewing the amounts of rent they charge, with a view to helping SMEs endure the problems the coronavirus pandemic causes them.
The Macao SAR Government began in April distributing Wealth Partaking Scheme money, sooner than originally planned. The 2020 Wealth Partaking Scheme gives each permanent resident of Macao MOP10,000 in cash and each non-permanent resident MOP6,000 in cash.
The authorities have promised to speed up their consideration of requests by SMEs for various sorts of government support, and to review the procedures for paying out the money. The pledge covers the SME Aid Scheme and the SME Credit Guarantee Scheme.
Second wave of help
On 8 April, Secretary for Economy and Finance Lei Wai Nong announced a second round of financial relief to counter the economic effects of COVID-19 (official press release available at https://www.news.gov.mo/detail/en/N20DHWNWdj?0). That included, among other measures, a MOP10-billion fund that aims to boost financial support to the community and help it ride out adversities linked to the pandemic (read more about the April pack of economic relief measures in the next issue of Macao Travel Talk).
|Relieve measures for cultural and creative industries|
The Cultural Affairs Bureau and the managers of the Cultural Industry Fund are also trying to relieve the impact of the COVID-19 pandemic on cultural and creative businesses in Macao. The Cultural Industry Fund has deferred for one year the repayment of MOP36 million worth of loans it made for 75 projects. The borrowers can ask to have other terms of their loans changed. The fund managers are preparing special funding programmes, details of which they will announce in due course.
The Cultural Affairs Bureau is putting back the project-completion deadlines for beneficiaries of its Subsidy Programme Series for Macao’s Cultural and Creative Industries. The bureau will also sponsor a series of programmes covering online education for handicraft topics. It intends to call in the first half of 2020 for proposals for such programmes by Macao makers of handicrafts, as a way to help keep them in business.