Last Updated on Tuesday, 20 September, 2022 at 2:51 pm by Andre Camilleri
The Chamber of SMEs has made clear that it accepts the Cost of Living Adjustment (COLA) system for what it is, even if it rises significantly. However, to combat this, it is proposing a tax reform to support SMEs further.
The reform would include lowering the tax schemes to incentivise business and widening the tax bracket for individuals.
Furthermore, the Chamber is asking to reduce the VAT percentage. It said that because of the rise in prices, the government can reduce VAT and still make the same amount of money as they were making before. The chamber is also asking to remove excise duty because it claims that bureaucratic costs are too high.
Through the tax reform, the Chamber also wishes to address the 6/7tax refund disparity. This refers to companies which are in possession of a foreign shareholder or have a holding company in Malta. They benefit from this disparity because they pay up to 30% less tax. Through the tax reform, the chamber would like to address this to have a level playing field.
The budget 2023 proposals that the Chamber presented were all based on a survey that it conducted to understand the main problems SMEs are facing.
A survey conducted for these proposals revealed that over 40% of respondents had to increase wages over the last 12 months up to 15%.
The survey also revealed that businesses were mainly struggling from a labour shortage and low-skilled workers.
It was further revealed that 49% of respondents lost employees over the last 12 months. The main reasons were either because there was a better private sector offers or because they went to work for the government.
As a result, in its proposals, it is asking to limit public sector employment and implement a secondment plan for more employees to work within the private sector.
It also highlighted the importance of foreigners working in the country, and to support this is it proposing trade programmes and an efficient Third Country Nationals recruitment system.
In the case of importing goods, the Chamber is also asking for a scanner to be used at the exit of the Malta – Sicily catamaran, so that any goods which are being bought from Sicily that are taxable will be spotted.
Additionally, another proposal states that VAT and customs duty should be calculated on the cost of goods only, and not the shipping cost.
As for import challenges, it also proposes increasing incentives under the Rent Subsidy Scheme, an independent review of customs procedures and to address import costs and Brexit at an EU level.
To combat bureaucracy, it proposes removing audit requirements on micro SMEs with under €500k turnover. It also proposes revising the Malta Business Registry fees. The Chamber said that, for example, if companies handed in their beneficial ownership document late, companies face a €500 fine.
The Chamber also wants a better regulations unit and to address banking dominance.
As for incentive schemes, it is asking for an improvement in MicroInvest, incentives for green transport, the yachting industry, private education providers and renewables.
To increase the quality of life, it is proposing a quality strategy for Malta which addresses development planning, traffic issues and safety and security. A tourism competitiveness scoreboard and technology to govern scooters is also being asked for.