Uruguay announces tax exemptions for small businesses and subsidies due to pandemic

RIO DE JANEIRO, BRAZIL – The Uruguayan Government announced on Tuesday, April 20, a series of economic and social measures, including tax exemptions or economic benefits, to combat the adverse effects left by the Covid-19 pandemic in the South American country.

This was announced at a press conference by the Ministers of Economy and Finance, Azucena Arbeleche; of Labor and Social Security, Pablo Mieres; of Tourism, Germán Cardoso; of Social Development, Pablo Bartol; and of Industry, Energy and Mining, Omar Paganini.

During the appearance, which was also attended by the President of Uruguay, Luis Lacalle Pou, Arbeleche said that the Coronavirus Fund would have an estimated amount for 2021 of US$900 million for the different benefits and expenses.

Specifically, Tuesday’s measures focused on the sectors most affected by the pandemic, such as tourism, lodging, gastronomy, transportation, theater, sports, informal workers, or people in vulnerable situations.

Some of the measures for these small businesses are the exemption of 100% of the employer’s pension contributions during the first semester of the year, access to credits with facilities or loans of up to 25,000 pesos (about US$550) with zero interest rates.

“The uncertainty that we have at this moment is why we have to give support in a very responsible and very thoughtful way. The worst thing you can do is to give support and have to take it away. We have to be very cautious and responsible,” explained the Minister of Economy and Finance.

However, she stressed that the State would give “all the necessary resources” to support the health, social or productive sectors.

Meanwhile, the Minister of Social Development said that support for informal sectors “of meager income” will continue and said that family allowances, which were doubled in May, will also be doubled in June.

Likewise, there will be a subsidy for “monotributistas Mides”, who are small entrepreneurs “with meager sales,” which will consist of 7,305 pesos for three months (about US$161).

Bartol also detailed that it is estimated that 320,000 people will receive food baskets in the next months.

Due to the closing of the border, tourism has been one of the hardest-hit sectors; therefore, the head of this portfolio said they prepared “a rescue plan” and support a waiver of fiscal space “critical” the government.

Cardoso highlighted the ‘SiGa Turismo’, a guaranteed credit for companies in the sector. For this reason, it is important to “maintain, sustain and deepen it” and that it has a scope to the smaller sectors.

Also, the minister announced that the duty-free stores located on the border with Brazil, which, due to the increase of cases in the area, had to close until April 30, were included in the tourist activity.