The Malta Chamber of Commerce, Enterprise and Industry have officially released their Budget 2021 proposals, which consolidate the numerous calls to action, proposals and policy papers released by the lobby group from January 2020 until now.
Over 130 key recommendations have been produced, with 20 priority recommendations. The recommendations are also based on 11 over-arching calls for long-term action.
The Malta Chamber President, David Xuereb, stressed that this Budget is the most crucial for rebuilding a future vision of Malta, and a key opportunity for analysis on what has worked for the local economy so far, and what hasn’t.
Among the most striking proposals, the Chamber is calling for the COVID-19 wage subsidy to be maintained until a vaccine is administered, and for the scheme to be improved by linking it to the “re-engineering of the beneficiary business to enable employee adaptability through re-skilling/upskilling, for the employee for be more future proof”.
Of note and undoubtedly a huge burden for businesses during these uncertain times has been the burden of paying quarantine leave. Currently, employers must pay 50 per cent quarantine leave for full-timers with no subsidies for part-timers.
On this, the Chamber is proposing that sick leave is paid by the Government from day one, including COVID-related absenteeism to business.
“This measure should also include quarantine leave and absenteeism related to hybrid schooling or preventive closure of schools.
“On absenteeism related to schooling, the existing scheme precludes employees taking care of children, from working any number of hours. This scheme should be amended to incentivise parents to work at reduced hours.”
The Chamber is also proposing a one-time payment to households in lieu of Cost of Living Adjustment (COLA). “In view of the unprecedented situation faced by by business and the expected negative growth in GDP until year end, the Malta Chamber expects that the ‘Exceptional Circumstances’ clause, already contemplated for in the law, is triggered”.
It has called for further fiscal measures to support cash-flow in business, highlighting that a vast majority of economic operators are expected to run financial losses during 2020, yet towards quarter four of the same year, they would be due to settle their final tax balances for year of assessment 2019.
“Consequently, it is recommended that Government allows companies to carry back tax losses made in 2020 to neutralise their raxes due for 2019, whilst at the same time affording a liquidity relief and limit the risk of further insolvencies.
“Similar liquidity relief can be provided via offsetting tax amounts owed by such companies with any dues receivable from Government in tax rebates or payment for contracts.”
The Chamber is recommending a reduction of utilities and fuel prices, to reflect market prices for industry and domestic use, “with any hedging obligations to be covered by the Government”.
It has also called for a reduction of VAT for hospitality and tourism, including yachting related services, from 18 per cent to seven per cent, accompanied by a holistic strategy for COVID and post-COVID tourism.
It believes that VAT return payments should be spread annually over three payments instead of four, “to improve the cash-flow situation of companies by giving adequate breathing space for creditors to retrieve their dues”.
The Chamber is seeking an increase to rent assistance to “all commercial tenants in terms of rents in the short term”. It commented that this measure should be tapered down by the time a COVID-19 vaccine is administered.
Geared towards parents, the Chamber is recommending further support to help balance a scenario where children still have to be schooled from home, even in the case of hybrid schooling. In this regard, the Chamber is recommending for the incentivisation of flexible working patterns “which necessitates incentivising and upskilling CEOs and management to manage their staff against Key Performance Indicators when working remotely”.
It has also recommended tax deductions for parents purchasing IT equipment got children’s education, which “should be as simple as the teleworking grant scheme”. The Chamber also called for the Government to support education institutions to be COVID-safe by upgrading digital infrastructure and contactless physical infrastructure.
Other recommendations of note include:
• Driving towards a zero carbon economy by incentivising training and education in sustainability in the widest contact. Here, the Government should remove VAT on the development of LEED platinum certified buildings and on the electrification of transport
• Rebuilding and safeguarding Malta’s reputation through the recruitment of a Good Governance Officer to support and advise businesses in Malta. It also called for more resources in all Government entities responsible for transparency
• Re-launching the €100 vouchers to Maltese households
• Contactless infrastructure, services and customer experiences
• No single use plastics by January 2022
• A strategic vision for the building and construction industry “as a complete reform is required for this sector”
• New vision for manufacturing in Malta
• Implementation of the AI strategy
• Logistics Scheme savings on port charges should be partially passed on to clients