cONTINUE rEADING
Malta announced its €900 million financial package to be invested in furtherance of economic stability and growth and targeting the reduction of running costs of businesses, boosting local demand and local tourism, helping the real estate industry and generally supporting businesses.
The economic regeneration plan was announced on the 8th June 2020 and explained in detail by Prime Minister Dr Robert Abela alongside Finance Minister Profs Edward Scicluna and Minister for the Economy, Investment and Small Businesses Mr Silvio Schembri.
Reducing the Running Costs for Businesses
- Business classified as Annex A and B on the website of Malta Enterprise will receive a refund of 50% (capped at EUR1,500) for electricity bills as well as a one-time grant of up to EUR2,5000 to cover the cost of rent incurred during the summer months (July, August and September).
- Any commercial license fees pad by businesses to the Commerce Department and/or the Malta Tourism Authority for the year 2020 shall be refunded.
- A 33% reduction in port charges and a 10% refund on container discharge fees have also been announced.
Boosting Local Demand and Local Tourism
- Cash vouchers of €100 will be distributed to all persons over the age of 16. These vouchers will need to be utilised by the end of September 2020 and are to be spent as to 80% on accommodation, restaurants and bars and as to 20% in outlets.
- In line with previous budgets, the government has announced that it shall be granting tax refunds to individuals in the workforce earning less than €60,000 in the amount of €40 – €68.
- The in-work benefit scheme has been extended to include more low-income families and an increase in the grant per child was announced.
- Individuals who had to postpone their wedding due to COVID-19 will receive a reimbursement of their forfeited deposit up to a maximum of €2,000.
Helping the Real Estate Industry
Several tax incentives have been announced in relation to real estate:
- The definition of first-time buyers under the Duty on Documents Act shall be extended so as to allow the qualification as first-time buyers also to persons who already are part-owners in property or owners of a garage;
- Income Tax shall on the sale of immovable property shall be reduced to 5%, when the applicable rate would otherwise exceed 5%, and this in relation to the first €400,000;
- Stamp Duty on the purchase of immovable property shall be reduced to 1.5% for the first €400,000.
Further guidance and relative Legal Notice is awaited in relation to these fiscal measures.
Supporting Businesses
- The wage supplement currently in place will be extended until the end of September, depending on the area of business. In relation to tourism-dependant businesses there shall be no changed to the current €800 per month for full-time employees and €500 per month for part-time employees, whereas for all business in Annex A which are not tourism-dependant, as from July 2020 the wage supplement shall decrease to €600 per month for full-time employees and €375 per month for part-time employees.
- An extension of the previously announced tax deferral scheme shall be extended until the end of August 2020. With respect to Final Settlement System and Social Security Contribution payments, these shall resume as from July 2020.
- A new facility is being worked upon so as to enable the Government to underwrite corporate bonds maturing in 2020.
- Provision has been made for up to 30% of MicroInvest Tax Credits (capped at €2,000 for Malta-based businesses and €2,500 for Gozo-based or women-led businesses) to be converted into Cash Grants.
- Each enterprise shall be eligible for support of up to €5,000 to assist in the development of business plans and business re-engineering.
- Enterprises carrying out digital promotion in new markets can request assistance up to €10,000 per enterprise. Support will also be provided to companies looking to export to new markets through an export credit guarantee scheme.
- Other measures include assistance to certain homes for the elderly, skills development training schemes for entities employing less than 50 employees, grants to companies undertaking digital campaigns in foreign markets, reimbursement of costs incurred for international fairs that have been cancelled, as grants to construction enterprises to invest in modern equipment.
Other Measures
- The price of petrol and diesel has deceased by 7c per litre.
- Non-Governmental Organisations have been allocated a fund to assist with the impact they have suffered from COVID-19.
- A legal framework will be developed for SMEs to publish non-financial information relating to environmental, social and governance considerations.
- Capital Projects and Infrastructure have seen a substantial investment through this financial package.
