Switzerland – Measures for Zug’s economy

Corona virus: Canton of Zug extends a safety net for Zug businesses.

Switzerland, and thus also Canton Zug finds itself in an extraordinary situation. With the various restrictive measures taken by the Confederation to combat the coronavirus, the population and businesses of Zug are confronting a major endurance test.

To mitigate the severe restrictions, the Cantonal Government of Zug has determined a number of locally effective measures, supplementing federal measures and based on emergency law. This includes the implementation of a helpline for Zug companies. These measures aim to ease the burden on Zug’s businesses as quickly, easily and in the best way possible.

The Cantonal Government of Zug is aware that the current situation is not only placing great pressure on society, but also on Zug`s businesses. For this reason, it approved a plan this morning with various measures in addition to federal measures, including the offer of a helpline for Zug companies from Wednesday 25th March 2020.

Quick Wins
Canton Zug is committed to paying creditor invoices immediately and not to make use of payment deadlines. It had already paid creditor invoices of over 40 million Swiss francs immediately last week. The Cantonal Government will also extend the payment deadlines with its debtors from 30 to 180 days. The Cantonal Government has also decided on immediate measures in the area of taxation. It has extended the deadline for filing tax returns in 2019 and the payment deadlines for all taxes to the 30th June 2020, abolished the default interest of 4 per cent for cantonal and communal taxes and suspended the issue of new tax invoices and assessments until the end of April 2020. Further tax payment facilities and the examination of further procedural simplifications in favour of tax customers are a standing order in the current situation.

Liquidity supply and support funds
Canton Zug is providing an à fonds perdu contribution of CHF 20 million as a safety net for individual companies, self-employed persons and small businesses with a maximum of 20 employees who are likely to fall through the net of existing measures. This is intended to prevent or alleviate branch closures, bankruptcies, redundancies and other drastic negative consequences. In addition, the canton of Zug intends to provide a credit default guarantee of CHF 100 million in favour of the commercial banks in the canton. This measure is a subsidiary and follow-up measure to the federal measure. The coordination of the process will be assigned to the Finance Directorate and the Zuger Kantonalbank.

Reduction of the cantonal tax rate
At its meeting this morning, the Cantonal Government also discussed a tax rate reduction. It instructed the Finance Directorate to apply within a shortened procedure to the Cantonal Council for a three-year reduction of the cantonal tax base from 82 per cent to 78 per cent (2021-2023). With this measure, the Cantonal Government is convinced that it will make an important contribution to relieving the burden on taxpayers (both individuals and companies) by introducing a meaningful economic stimulus measure.

Cultural, social, sports, educational and agricultural sectors
It is foreseeable that charitable, non-profit and cultural organisations will suffer threatening financial losses as a result of the effects of coronavirus. As a supplement to the federal measures, the canton will provide where necessary, financial support to the organisations that are exceptionally affected. For this purpose, an additional CHF 5 million each will be withdrawn from the lottery fund and the sports fund, which the canton guarantees from the current account. As a further measure, the agricultural operating aid fund will be increased by 600,000 francs.

Standing together in the crisis
The situation is serious. The Cantonal Government is therefore willing to commit substantial resources to emergency aid. As the economic location of Zug has a solid financial structure, which is also reflected in the liquidity of the canton and the municipalities, it is in a position to provide support where it is most needed. This starting position is based on the tax payments of all Zug businesses and private individuals in recent years. We are grateful to all those companies and private individuals whose tax payments have enabled us to achieve this starting position in recent years. The Government Council continues to appeal to the solidarity of the economy and the population. The public sector cannot master this crisis on its own.

Source: https://www.zg.ch/

Image Source: http://unsplash.com

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