Gov’t to roll out seven new business subsidies

Seven new financial subsidies for local businesses will be introduced later this year in response to the current Covid-19 outbreak, Secretary for Economy and Finance Lei Wai Nong announced yesterday afternoon.

The seven types of subsidy are: housing tax refunds for industrial and commercial real properties; tourism tax waivers for this fiscal year; vehicle circulation tax refunds for commercial vehicles such as trucks and taxis; refunds or waivers of the license administrative tax and its related fees; petrol subsidies for taxis; a new round of subsidies for employees, freelancers and business operators; and a special interest subsidy on loans granted to local businesses.

According to Lei, the new financial subsidies will total MOP10 billion in value.

The measures must be passed by parliament in a budget amendment procedure before they can take effect. The government may trigger the emergency process, which would allow the subsidies to pass without discussion by the parliamentary committee, but passage by the legislature will still be required.

At a press conference announcing the subsidies, some journalists asked whether the government would implement these measures as soon as possible.

In response, Lei emphasized that the parliament must be involved to lawfully implement these new measures. The senior official highlighted that, despite the urgency, due process could not be bypassed.

The official also noted that the Monetary Authority of Macao (AMCM) had instructed local financial institutions to extend the validity of the “interest only loan repayments” measure to the end of next year.

For the time being, it is unclear what impact this measure will have on the market when combined with the interest rate increase by the U.S. Federal Reserve. Theoretically, due to the Linked Exchange Rate Mechanism concerning Macau Patacas, Hong Kong Dollars and US Dollars, interest rate fluctuations are interconnected.

Before announcing the new subsidies, the senior official also recapped the existing financial measures that have been put in place in response to almost three years of de-facto lockdown in Macau caused by Covid-19.

There are six existing measures: the early issuance of the Wealth Partaking Scheme funds, commonly known as the “cash handout;” professional tax refunds being capped at MOP14,000 or 60% of the tax paid for the fiscal year of 2020; a short-term food subsidy to local residents who are involuntarily unemployed; the third-round electronic consumption stimulus; electricity and water bill subsidies in 2022; and subsidies that aim at encouraging local employers to hire local residents.

reading for Gaming Law Amendments 

Also at the press conference, the senior official was asked if he still felt confident about the second reading in parliament of the gaming law amendments, which was set to take place this week.

Even if the bill does pass in parliament, there will be a lot of work for the executive before the new casino licensees are determined.

In response to this question, Lei emphasized his confidence in the second reading, although he highlighted that the professional judgment of the Health Bureau (SSM) must be observed and followed.

He acknowledged the urgency of the bill’s passing but reiterated that the SSM has the final say on whether gatherings, including parliamentary meetings, may be held.