Is Malta’s com­pet­i­tive­ness slid­ing?

Malta Independent - - NEWS -

To­day’s front page story which re­ports that Malta is the most dif­fi­cult coun­try in the whole of the Euro­pean Union in which to do busi­ness does not make for pretty read­ing, com­ing as it has as Malta is in the throes of the yearly de­bates over a bud­get cooked up by a gov­ern­ment that prides it­self on its pro-busi­ness at­ti­tude. The World Bank, how­ever, has once again la­belled Malta as not only the least busi­ness-friendly coun­try in the EU, but it also placed Malta in a global 76th place on a global level in terms of its busi­ness friend­li­ness. The main sore points about do­ing busi­ness in Malta, ac­cord­ing to the World Bank’s au­thor­i­ta­tive study, re­main in the ar­eas of reg­is­ter­ing prop­erty, get­ting credit start­ing a busi­ness, re­solv­ing in­sol­vency, deal­ing with con­struc­tion per­mits and get­ting elec­tric­ity. On the other hand, Malta per­formed some­what bet­ter in the ar­eas of en­forc­ing con­tracts, trad­ing across bor­ders, pay­ing taxes, and pro­tect­ing mi­nor­ity in­vestors. Not only are the find­ings some­what more than con­cern­ing from the point of view of lo­cal busi­nesses, but the au­thor­i­ta­tive an­nual report is also used by count­less cor­po­ra­tions and busi­ness when tak­ing the very del­i­cate de­ci­sion about ex­pand­ing over­seas. The Ease of Do­ing Busi­ness report sheds

Ed­i­tor’s pick

light on how easy or dif­fi­cult it is for a lo­cal en­tre­pre­neur to open and run a busi­ness when com­ply­ing with rel­e­vant reg­u­la­tions. It mea­sures and tracks changes in reg­u­la­tions af­fect­ing ar­eas in the life cy­cle of a busi­ness and out of the economies of 190 coun­tries an­a­lysed by the World Bank in terms of the ease of do­ing busi­ness in them, Malta is ranked rather dis­mally. Greece, in a far bet­ter 61st place, was the se­cond-most dif­fi­cult place in which to do busi­ness in Europe. Den­mark, in global third place, was the EU’s eas­i­est. There are myr­iad ac­counts from busi­nesses about such dif­fi­cul­ties which can­not be de­nied, nor can the gov­ern­ment deny that such hur­dles ex­ist. Just ask any­one who has ap­plied for credit or for any of the ne­ces­si­ties for open­ing and run­ning a busi­ness.

There is, how­ever, pos­i­tive news in that th­ese lat­est find­ings should spur the gov­ern­ment into more ac­tion along such lines. Last June the gov­ern­ment took ac­tion. At the time, the Prime Min­is­ter had ex­pressed shock over the dis­mal find­ings and pledged to ad­dress the is­sue im­me­di­ately, and he did, in the form of a com­mit­ment signed by rep­re­sen­ta­tives of gov­ern­ment de­part­ments and en­ti­ties stip­u­lat­ing new dead­lines and meth­ods with the fi­nal aim of re­duc­ing bu­reau­cracy and in­creas­ing ac­count­abil­ity when it comes to busi­nesses’ bu­reau­cratic red tape.

In fact, the World Bank noted in the an­nual report that was pub­lished this week that Malta made some im­prove­ments in the ar­eas of start­ing a busi­ness and of get­ting credit. In terms of the red tape in­volved in start­ing a busi­ness, the World Bank ob­served that Malta over the last year made start­ing a busi­ness eas­ier by of­fer­ing au­to­matic reg­is­tra­tion with the In­land Rev­enue Depart­ment fol­low­ing the re­ceipt of the com­pany reg­is­tra­tion num­ber. As for ac­cess to credit, the World Bank pointed out that Malta im­proved ac­cess to credit in­for­ma­tion by launch­ing a new credit registry.

But, on the other hand, the report ob­served that over the last year Malta made pay­ing taxes more costly by re­plac­ing the cap­i­tal gains tax with a prop­erty trans­fer tax, and in­creas­ing the max­i­mum so­cial se­cu­rity con­tri­bu­tion paid by em­ploy­ers. As such – and al­though its rank­ings have not im­proved very much over the last year, with no move­ment in terms of its EU-wide rank­ing and by only climb­ing four spots on a global level – the gov­ern­ment ap­pears to be tak­ing some tan­gi­ble ac­tion. Much more ac­tion along such line, how­ever, will be needed if Malta’s com­pet­i­tive­ness lev­els are to com­pete with its main com­peti­tors – its EU coun­ter­parts.

Newspapers in English

Newspapers from Malta

© PressReader. All rights reserved.