Additional financial support for businesses and families

The federal and Flemish governments have approved several new economic measures to help families and businesses affected by the coronavirus crisis. Restaurants, bars and fitness centres around the country were allowed to open on Monday, while some other businesses – such as amusements parks, cinemas and sauna – must remain closed for a few weeks more.

The federal government has lowered the VAT rate charged to restaurants and bars for food and non-alcoholic drinks from 12% and 21%, respectively, to 6%. The reduced VAT charges will be in force until the end of the year.

“The re-opening of the food service sector needs to happen not only safely but with extra financial support,” said federal finance minister Alexander De Croo. “Otherwise, we could be seeing dramatic consequences.”

The catering sector will also benefit – along with thousands of other companies – for a sharp decrease on salary withholding taxes during the summer months. They are being cut in half for any businesses that invoked the right to temporary layoffs during the corona crisis.

The overbruggingsrecht/droit passerelle – the right to a monthly compensation available to small and medium-sized businesses for loss of income – is also being extended to the end of the year. In addition, “consumption cheques” are being offered to employers. Employers can then offer them to employees as a benefit in much the same way meal cheques are offered now. Consumption cheques can be used in restaurants, cultural centres and for sports activities.

The government of Flanders, meanwhile, will pay a subsidy of up to €2,000 to shop owners, restaurants and other businesses that experience a 60% drop in revenue following an opening period of one month. The business owner must prove a loss of 60% compared to the same period last year. This one-time pay-out is in addition to the €3,000 businesses received that lost 60% of their income in March and April.

The €160-a-day premium paid to businesses forced to close is being extended until these businesses can open. This includes businesses that must remain closed a bit longer, such as cinemas, casinos and wellness centres.

Flanders is also offering €40 per child per month to families earning less than €2,213 a month. This extra amount will be added to the child allowance for a period of three months. The region is also providing local municipalities with vouchers to distribute to low-income families to spend at local businesses.

Finally, the Flemish government is spreading €15 million among city councils to contribute to programmes that support low-income families, such as food banks and summer schools.

Photo: Dirk Waem/BELGA