National Bank continues to reduce interest rates
On March 12th, interest rates on standing facilities liquidity support operations were reduced by 2 % to 30 % per annum.
Bearing in mind previous actions taken by the National Bank to increase access to bank’s liquidity, the interest rates on corporate loans are anticipated to drop below 40 % per annum. The National Bank will also reduce constraints on lending in the economy, will increase interest rate subsidies on loans in industry, will partially restructure agriculture’s debt, and will reduce financial requirements for companies.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.