“Resizing programs and instruments are necessary and urgent and should be considered in Portugal 2030” defended José Eduardo Carvalho in the webinar “Perspectives of PT 2030 - Incentives and financial instruments” that AIP, in partnership with Vida Económica, held on the 7th of December. The president of the AIP, who considers that capitalization and resizing are fundamental factors for the strengthening of the business fabric, portrayed the current situation, aggravated by the crisis caused by the pandemic: "There are 192 thousand companies that, in the year 2020, presented negative net results. There are 115 thousand companies that have negative equity. There are 166,000 companies that have negative EBITDA. There are 83,000 companies whose EBITDA generated was not sufficient to cover financial costs. And 92 thousand companies have a negative GVA”.
Given the existing framework, the association leader drew conclusions: "As there was no growth in dissolutions and insolvencies in 2020 compared to 2019, this proves that the measures to combat the crisis that were implemented were effective and that there was precipitation and little prudence in putting an end to the moratoriums and the deferral of the payment of taxes and contributions. On the other hand, the existence in a single decade of two crises, that of sovereign debt and that of the pandemic, ended up accentuating a differentiation in the Portuguese business structure that is increasingly clear: on the one hand, a segment of companies, which regardless of the sector, have appreciable levels of solidity, and this can be seen in profitability, size, balance sheet, capital stock, management quality, productivity, innovation, and the export profile. And then there is a segment with high levels of financial degradation and exploitation, which is much more numerous. They have deteriorated balance sheets, less EBITDA and more debt, unmanageable pressure on treasury, and depletion of equity”.
As for the downsizing, José Eduardo Carvalho considers that “with the current size of companies, we are going to have difficulty in creating the conditions to get out of the situation we found ourselves in 20 years ago, in which the economy stagnates and taxes continue to grow. We also verified that there is a positive correlation between company size and productivity, remuneration levels and average salary, innovation, export profile and EBITDA. If this is so, the question arises: why are there no scaling tools? They didn't happen in Portugal 2020 and from what we're seeing, they won't exist in Portugal 2030. We really need to contemplate and streamline these operations, because it is possible to create instruments that combine incentive systems with fiscal stimuli. Incentives on the value of acquisitions or guarantees on acquisition operations, fiscal incentives to reduce IRC rates, exemption from stamp duty on transactions, deduction of transaction costs from taxable income, etc. It is even possible to limit these pilot operations to one sector, for example the manufacturing industry sector because of its importance in the country's GVA. Or companies that present a certain volume of business or a certain number of employees, in which the borrowing company demonstrates appreciable economic and financial performance in recent years. Something has to be done.”
Extend the Setúbal peninsula solution to companies in the northern region of Lisbon to access PT 2030
The president of the AIP also called for “a solution to be found for companies located in the municipalities of Mafra, Vila Franca de Xira and Loures, which have very limited, or almost impossible, access to Portugal 2020 and the incentive systems currently in force . The solution that was found, and very well, for the Setúbal peninsula has to extend to the north bank of Lisbon. There is no justification or criteria, nor is it rational that this is not the case. There are 25,000 companies in these municipalities, which, given their importance, cannot be far from supporting the improvement of their management quality”.