Grant Thorn­ton’s Austin De­majo high­lights busi­ness-friendly bud­get mea­sures, in par­tic­u­lar as­sis­tance of­fered to SMEs

● Raises con­cerns over sus­tain­abil­ity of so­cial ben­e­fits should an eco­nomic down-turn take place

Malta Independent - - BUDGET 2017 -

Dis­cussing how the 2017 bud­get is ex­pected to im­pact busi­nesses, Tax Ser­vices Part­ner of Grant Thorn­ton Malta Austin De­majo spoke with The Malta In­de­pen­dent.

The main ar­eas of in­ter­est high­lighted by Mr Thorn­ton re­fer to the tax con­sol­i­da­tions be­ing in­tro­duced, ac­cess to the al­ter­na­tive trad­ing plat­form known as ‘prospects’ for SMEs and a re­duc­tion in the duty paid for the trans­fer of busi­nesses to the next gen­er­a­tion.

“Small busi­nesses or start-ups are go­ing to have ac­cess to the so­called ac­cel­er­a­tor pro­gramme (a pro­gramme which pro­vides ac­cess to ex­per­tise and knowl­edge). The in­cen­tives for these com­pa­nies to raise fi­nance on the al­ter­na­tive trad­ing plat­form known as prospects could go a long way, so there is go­ing to be tax in­cen­tives in­tro­duced for that and also for in­vestors.

“Ob­vi­ously this is a good way of push­ing the area of our busi­ness that re­quires most as­sis­tance as they (SMEs) need all the help they can get. Cer­tain in­cen­tives are now be­ing ex­tended to SMEs.

“The trans­fer of busi­ness to the next gen­er­a­tion is also of great in­ter­est, whereby the duty is be­ing re­duced from five per cent to 1.5 per cent. In the suc­ces­sion of the busi­ness to the next gen­er­a­tion this will help a lot.

“Fam­ily busi­nesses must be passed on to the next gen­er­a­tion, oth­er­wise they will cease to ex­ist. One of the main prob­lems when there is this in­her­i­tance is the duty payable, which can be quite hefty and can act as a dis­in­cen­tive to try and pass on the busi­ness. It also has a neg­a­tive im­pact on liq­uid­ity oth­er­wise, so this mea­sure could have a huge im­pact.

“An­other area of great in­ter­est is the re­duc­tion of the govern­ment debt as a per­cent­age of GDP – the low­er­ing of the deficit.

“There are some in­ter­est­ing in­tro­duc­tions to the bud­get like the in­cen­tives of the cre­ations of pri­vate pen­sion funds and oc­cu­pa­tion pen­sion schemes. We need to see the reg­u­la­tions to see how they will work out in prac­tice.

Turn­ing to mat­ters of con­cern, Mr De­majo spoke of the sus­tain­abil­ity of so­cial wel­fare ben­e­fits:

“I think it is fair that once the econ­omy is do­ing well cer­tain so­cial ben­e­fits, ei­ther new ones or enhanced ones, are dished out to those in need. One must be care­ful of en­sur­ing the sus­tain­abil­ity of in­creased so­cial wel­fare pay­ments. It’s quite right at the mo­ment be­cause the econ­omy is do­ing very well but in the event of a down turn, what will hap­pen? That is the only is­sue,” he con­cluded.

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