The Malta Chamber of SMEs is calling for lower taxes across the board, an extension of various measures announced in last June’s ‘mini-budget,’ and various other incentives in its proposals for the 2020 Budget published this week.
The chamber’s president, Paul Abela, noted that at the start of the year, businesses sought greater stability after a period of political upheaval, only for these hopes to be dashed by the Covid-19 pandemic. He said that while better times were ahead, this would not be the case before March at the earliest.
A series of tax cuts
The 19 proposals include a number which the chamber had already made in previous year, though it is insisting that given circumstances, now was the time to implement them. One such proposal is to reduce income tax on business trading income to 20% for the first €100,000 in profits, with the chamber arguing that it was crucial to leave more money in businesses’ pockets at this stage.
But it is also calling for the reduction of VAT rates across the board, from 18% to 10%, and for an extension to the special VAT rate of 7% for businesses which were hit the hardest by the pandemic. Additionally, it believes, no VAT should be levied on events, weddings, travel agencies and tour operators.
Another proposed tax cut is the removal of SISA on all goods which do not carry the excise identifying marker, with the SME chamber describing it as an unfair hidden tax on consumption.
Additionally, the chamber insists that there should be no business succession tax on causa mortis when a business stays within the immediate family.
Extension and expansion of Covid-19 measures
The chamber insisted that the Covid-19 wage supplement was the most crucial measure keeping businesses afloat, and warned that its removal would lead to mass unemployment. Therefore, it argued, it should be extended at least until March, and that employers should be given the opportunity to allow the supplement to cover new hires which replace employees who had left and were not made redundant.
It also said that the €100 voucher scheme proved to be effective, and called for another round of vouchers to be distributed for the winter season, though with blue vouchers, which could be used in outlets which had to close during the first wave of the pandemic, accounting for €40 instead of €20.
The chamber also believes that moratoria on bank repayments should be extended for an additional 6 months in the form of a partial moratorium, and that an interest rate subsidy of 2.5% should be extended to all loans linked to new investment.
In light of what it described as a very volatile employment market, the chamber is proposing two employment and training schemes, one targeting those who are still employed and others those re-employed after losing their jobs due to the pandemic. The former is a full-financed training scheme that would retrain employees and help businesses adapt while in the latter proposal, the chamber suggests a re-employment grant, subsidising wages by €500 a month for a year when employers employ someone made redundant due to Covid-19.
The chamber also proposed the expansion of MicroInvest benefits and of the Get Qualified Scheme, as well as a grant scheme to help business cover the costs linked to developing a website and boost their eCommerce prospects.