Measures need to take tangible form – GRTU
The positive growth being experienced by our economy has produced wealth giving rise to the possibility of spreading economic benefits across sectors, the GRTU said last night in its first budget reaction.
Nevertheless, it said, continuous tangible incentives and measures are necessary in the implementation phase to ensure that the positive economic results are not only achieved but sustained.
Widespread fiscal benefits
GRTU said it sees that direct fiscal measures targeted at wider sectors such as pensioners and those on minimum wage are expected to increase disposable income to generate economic benefit across the board.
Traffic and transport
The GRTU’s calls and proposals for immediate solutions to the traffic crisis have led to a number of commitments and measures in this budget. Private collective transport is being incentivised by tax deductions to employers that organise free transport for their employees and large government entities are to provide transport for their own. The urgent need to give a full focus on the Kappara Junction Project to increase the rate of work drastically in order to reduce the negative impact of the length of the project seems to have been heard with a renewed commitment. Incentives to increase parking areas through Projects Malta and Planning Authority proposals to attract public car parks also echo GRTU proposals to solve the traffic crisis. Measures addressing organised school transport which are key for imminent improvement have unfortunately been left out.
The GRTU said it fails to understand how for yet another year, possible savings for businesses through reductions in energy bills has not been transcended to boost the economy. Following last year’s call by GRTU to decrease utility tariffs, one of GRTU’s main proposals was that of opening up the energy market to more operators in a bid to increase competition and reducing cost to businesses.
Renewable energy initiatives such as the PV Farm project have always been advocated by the GRTU and is once again welcomed as it is being committed to in the budget. It is, however, the second year to see this proposal in the budget and now GRTU awaits immediate implementation.
The chamber said it is welcoming to note that its proposal on removing senseless compulsory audits for micro-SMEs has partially been taken up by introducing this option for the first two years for start-ups. This is the very first time this concept has been introduced in Malta. This incentive is, however, only tied to post-graduate start-ups and should definitely be extended to all start-ups if we want all youths to feel empowered on an equal level and not discriminate between business ideas based on educational attainment.
GRTU constantly advocates for the reduction of bureaucracy and therefore welcomes the announcement of removal of trading licenses.
The positive results of decreasing unemployment rates have led to human resources evidently becoming more of a key growing concern to employers across the majority of sectors. GRTU expected to see tangible aggressive measures to address the imminent situation with solutions to a problem that can no longer wait to be tackled.
GRTU’s proposal for a mandatory pension for self-employed with voluntary opt-outs has resulted in voluntary pension incentives for employers and their employees. In GRTU’s opinion this is a positive step yet the take-up is expected to be weaker than that of the original GRTU proposal.
Extension of the Valletta shop scheme
GRTU is pleased to note that the successful 45-year emphytheusis scheme for businesses operating in rented publically-owned premises, negotiated by GRTU in the case of Valletta shops, is now being extended beyond Valletta.
Family business transfer
The measure for family business transfer stamp duty to be reduced from 5% to 1.5% from parent to child is a tangible implementation of the Family Business Act concept. GRTU, however, asks why this is only being launched for 12 months where such timeframe does not allow for planning and execution.
Joint enforcement task force (unfair competition)
GRTU sees initiatives under a new name which are once again supposedly targeted at addressing unfair competition. GRTU hopes that the launch of the Joint Enforcement Task Force would be a tangible initiative this time round as this is a long-awaited essential point to be tackled for SMEs and enterprises that are being driven out of business due to unfair competition.
The flexibility of opening hours according to business needs is another long-awaited commitment by government which has been dragged from one budget to the other. GRTU asks that after exhaustive consultation and such a long wait, this is implemented by the end of the year.
GRTU has noted the increase in specific excise duties such as toiletries, non-alcoholic drinks, glass, iron and tiling, and shall be looking into the expected effect on various sectors. After years of being hindered by eco-contribution tax, these businesses are now being castigated with the introduction of excise duty.
Other incentives noted positively by GRTU include the introduction of the Risk Inventing Scheme for Investment in SME companies which will receive tax incentives of up to €250,000 and the stamp duty reduction from 5% to 2% in the case of Gozo.