Tackling grey-listing effects high on Chamber of SMEs’ agenda as budget proposals launched

The Chamber of Small and Medium Enterprises (SMEs) have launched its proposals for the upcoming budget, with tackling the effects of Malta’s grey-listing by the FATF high on the agenda.

One set of proposals, in fact, is solely aimed at mitigating the impact on businesses caused by the said grey-listing.

The main aims for the proposals launched by the Chamber are to accelerate the economic recovery, future proof it, to address the lengthened Covid-19 pandemic impact and to move towards normality.

The proposals are split up as follows;

Tax proposals

The first proposal by the Chamber is to widen the existing middle tax bracket. This means that the 25% tax bracket would be extended to those with a gross income of €100,000 per year.

Another proposal related to tax was to remove excise duties on all imported goods that do not carry the excise identifier marker.

Rescue package for worst Covid-19 hit businesses

Throughout the pandemic, numerous businesses suffered from reduced income for long periods of time. Due to the lengthened effects of the pandemic, the Chamber of SMEs proposed the continuation of certain government incentives while proposing other.

The extension of moratoria and the lengthening of loan repayment periods are the first proposals in this set. The further extension of Covid support assistance with regards to the wage supplement, along with rent and electricity grants is also an important government incentive which the Chamber wants to be extended.

The Chamber also proposed that certain accumulated debt due to the Covid-19 pandemic should be changed into a nonrepayable grant based on specific criteria.

This also ties in with the Chamber’s next proposal which concerns itself with aggressive grants. The SME Chamber said that the use of aggressive grants to help businesses in refurbishment, reemployment and marketing would help pave the way to normality.

Addressing the adverse banking environment

“Due to the increase of regulations caused by the grey listing, Maltese banks need to be regularised in order to avoid people being treated unfairly,” Chamber of SMEs CEO Abigail Mamo said.

In order to address this issue, the Chamber proposed that a task force for banking services would be set up. Apart from the task force, a supervisory board is also proposed in order to “regularise the banks and make sure that people are not made to pay more than they have to”

Apart from these, the Chamber is also proposing to the government to attract more competition in Malta in order to create a level playing field.

The workplace

With regards to the workplace, the Chamber proposed a number of ideas related to quarantine leave and the workplace environment.

When it comes to quarantine leave, the Chamber argued that unvaccinated employees by choice should not be eligible for quarantine leave. This also applies to employees who willfully travel to countries which require quarantine upon arrival.

Another proposal related to the pandemic, the Chamber said that employers should have more information about the state of vaccination of their employees and their travel plans in order to mitigate the possibility of an outbreak at the workplace.

The last two proposals in this cohort are concerned with professional team building activities and the revamp of the 2% quota financing mechanism.

Accredited training

The Chamber said that proper training incentives for employees need to be put in place in order to improve the quality of work.

This can be done by fully financing training schemes based on the employees needs and revamping the get qualified scheme.

Imports and Exports

When it comes to importation and exportation of products, the Chamber of SMEs recognised the limiting factors Malta has.

“Due to the fact that everything has to be exported and imported either by air or by sea, this creates immense costs paid for by the businesses,” Mamo said.

The Chamber therefore agreed with the Nationalist Party’s proposal of a national fund which would mitigate the expenditure of imports and exports.

The Chamber is also proposing shipping agreements to be made with countries, especially the United Kingdom. “Malta has to present its case to the EU in order for Malta to get special exemptions on Brexit procedures.”

Mitigating the grey listing

With regards to the grey listing, Chamber president Paul Abela said that “I hope that the grey listing does not introduce a system where small businesses would be targeted. The fact that there are some small business owners in prison for failing to pay their taxes is horrendous when one sees that both political parties still have outstanding tax bill to be paid.”

This is a reference to a recent Times of Malta story which found that both the Labour Party’s and the Nationalist Party’s media wings have some €5 million in pending tax dues still to be paid.

Therefore the Chamber is proposing the setting up of a centralised system to remove bureaucracy and also to incentive employers to invest in proper due diligence systems.

Proposals about carbon neutrality incentives and others specific to Gozo were also included.