Budget 2017 Survey Results

Continued from page 5

When dealing with plastic sacks and bags, only the price of the black bag normally used for non recycled waste is being increased by 0.012 cents per bag. The rate for all other plastics bags will remain unchanged. Bio-degradable plastic bags will remain zero rated. The grey and green bags, as in the case of bio-degradable bags, will remain untaxed. Again, this was tackled for the business that deal with the production of such products and buyers that buy the said products.

As with regards to toiletries and beauty products, the prices will be on the increase some with an increase in Euros and others with an increase in cents.

To eliminate double taxation, concrete structures the manufacture of which entails the use of cement and steel rods on which excise duty is already paid, are exempt. Other related components are to be increased by cents.

The results above show that new rates relating to manufacturing will affect the most participants negatively (52%). 30% of the participants answered that it would affect them positively and the remaining 18% will not be affected. The negative replies could be due to businesses buying the said products; the positive results could imply that they are in said business.

Non-alcoholic beverages seem to have gotten the most negative results. The results relating to nonalcoholic beverages shows that 49% responded negatively, 32% answered positively and the remaining 19% responded that it would have no effect. The negative results could be due to businesses buying the said products whereas the positive results could deal with businesses dealing in selling the said products.

The new rates on plastic sacks and bags received 54% positive results, 27% were negative results and the remaining 19% would be unaffected.

The product that received the most positive results was toiletries and beauty products. 62% of the participants answered positively, 22% answered negatively and the remaining 16% responded that it would not affect them.

New rates on construction components and related products show that 54% of participants answered positively, 30% answered negatively and the remaining 16% said it would not affect them.

Export Credit Agency

Export Credit Agencies are public agencies and entities that provide government-backed loans, guarantees and insurance to corporations from their home country seeking to do business overseas in developing countries and emerging markets that are considered too risky. There is work being carried out to set up such an agency in Malta.

The participants were asked whether they think this will benefit the business sector; 77% answered yes, 20% answered no and the remaining 3% are undecided.

Government Owned Shops

A scheme for government-owned shops which are leased was set up where the latter will now benefit from a title of temporary emphyteusis of 45 years. 18% of participants answered that this will not be beneficial for their business, 79% answered that it will not affect their business and the remaining 3% answered it will affect their business negatively.

Large Projects

It is now possible for development application fees for large projects to be paid in instalments over a period of time. By the results, it seems that most participants will not be taking on any large projects since 67% answered that the former will affect them neutrally. 24% of the participants answered that this will affect them positively and the remaining 9% answered it would affect them negatively.

Foreign investment

To insist on and defend the Maltese system of taxation in the light of international developments whilst at the same time continuing to ensure that our tax regime is constantly up to date with the latest developments, the government intends to introduce new measures meant to promote more foreign investment such as a system which accords the same benefits to capital investment as it does to loans.

85% of the participants answered that they agree with such measures, 2% disagree with such a measure and the remaining 13% are undecided.

Fiscal Incentives

Fiscal incentives will be set up for entrepreneurs who float shares in their companies for public investment. Earnings on capital derived from the shares will be exempt from tax. Participants were asked if this would influence their business decisions. 63% answered that it will not, most probably because they are not entrepreneurs. 23% are undecided and the remaining 14% answered yes.

The participants that answered yes said that it could be a competitive advantage against other companies; it’s a different approach in raising finance as well as it expands the value of investments.

Shops and other commercial premises

In order to reduce bureaucracy when opening a business, shops and other commercial premises will no longer require a trading licence to operate commercial activity.

37% of participants answered that this will affect businesses positively, 57% said that it will affect their business neutrally and the remaining 6% answered that it will affect their business negatively. The latter is probably due to more businesses entering the market hence, more competition for the said businesses.

Small and Medium Entities

An international accelerator, in the context used during the budget, seems to be a programme that gives access to seed funding, quality mentors, and services needed to start up in a country.

An International Accelerator is going to be introduced. This should give access to networks of entrepreneurs who could help Maltese start-ups to widen their operations. 50% of the participants said that they would make use of such a programme, 28% are undecided and the remaining 22% said that they would not.

In 2017, new fiscal incentives in the form of a Risk investment Scheme for those investing capital in SMEs or in an investment fund spread over a number of SMEs, will be set up. Individuals who invest in this manner will receive a tax credit of maximum €250,000 per year. Participants were asked whether they would invest in such a manner. 55% answered that they would, 26% said that they are undecided and the remaining 18% answered that they are undecided.

Malta Enterprise will include a scheme offering financial assistance to disadvantaged individuals to help set up a sustainable business. Participants were asked if they agreed with such a measure. 77% of the participants answered yes, 10% answered no and 13% are undecided.

Conclusion

Since the survey was aimed at seeing the participants’ views on the proposals proposed by the Minister for Finance, it should have informed the participants in detail as to what the proposals entailed.

At the beginning of the survey, participants were asked whether they thought that the proposals would benefit Malta’s business sector. After being asked specific questions regarding the business sector proposals, participants were asked whether the questions in this survey changed their mind about the Budget 2017 benefitting the business sector.

The outcome resulted in 70% of the participants responding yes, 25% responded that they are undecided and 5% answered no. At the beginning of the survey, 59% answered yes, hence after the survey was conducted, more participants are convinced that the proposals will benefit the business sector. 11% answered no in the beginning; this went down to 5% hence less are convinced that the proposals will not benefit the business sector. Also the number of participants that were undecided in the beginning resulted in 30% but dropped to 25% after taking the survey.