Some 47% of small and medium size businesses who applied for loans during the pandemic  were rejected for being unable to provide proof of up-to-date tax payments.

This is according to Finance Minister Colm Imbert, who made the revelation during a press conference on Monday. 

Noting that the program was designed to render the necessary assistance to these businesses during the Covid-19 pandemic, Imbert announced that following consultation with the Central Bank and stakeholders, government has softened its requirements, in order to have more businesses able to have their applications approved.

The changes are as follows:

-Government has amended the period of payment from five years to seven years.

-Government will now guarantee 100% of the loan amount, instead of 75%.

-Purposes for the loan will be expanded beyond payment of salaries and working capital, to fixed assets, plant & machinery, expansion of accommodation etc.

-Increase the amount of the loan available, as required

-Lowering the threshold for access to the loan facility to $500,000, with maximum at $25million (annual revenue)

-Interest rate remains 0%

As it relates to tax obligations, the Ministry of Finance has now said it will accept people who have tax payments paid up to at least the end of 2018.

“We are going to go back in time, in terms of the requirements for persons to be up to date with the statutory obligations, such as VAT, income tax, corporation tax, NIS- and we’re taking it back to the year end 2018. So the applicants must now show that they up to date with taxes and NIS payments up to 2018. And they’ll be given one year after they get the loan to bring them up to date,” Imbert explained.