Economic Regeneration Plan - Measures Announced

Updated: June 09, 2020 | 6 minute read

Interested in our services? Our team is here to help.

Contact us

Introduction

An economic regeneration plan consisting of various measures, aimed mostly at those businesses that were hit during the COVID-19 pandemic, was presented by the Prime Minister of Malta Dr Robert Abela, together with the Minister for Finance and Financial Services Prof. Edward Scicluna and Mr Silvio Schembri, Minister for Economy, Investment and Small Businesses.

The €900 million recovery plan budget is based on three main pillars:

  1. Cost reduction measures;

  2. Boosting local demand; and

  3. Direct sustainment to the industry and promoting work.

Wage Supplements

Wage supplements shall continue to be paid until the end of June. As from 1 July onwards, wage supplements shall be paid as follows:

  • For businesses engaged in tourist accommodation, language schools, mass event organizers, travel agencies and airlines – the same wage supplement will continue to be paid until the end of September 2020;

  • Those in other sectors not mentioned above that were receiving wage supplements under Annex A will have gradual reductions of €600 for full-timers and €375 for part-timers until the end of September 2020;

  • Those providing other personal services that were under Annex A will be shifted to Annex B;

  • Those that were categorized under Annex B to remain receiving the Annex B wage supplement until end September 2020;

  • Students and pensioners that had a part-time job but received their stipend or pension and who were being deprived of the wage supplement will now start to be eligible.

Tax Deferral Scheme

The tax deferral scheme is being extended to cover eligible taxes falling due until August 2020. However, FSS tax and NI, as well as maternity contributions, are to be paid in full from 1st July onwards. Other deferred eligible taxes should be paid by May 2021.

Property Tax Cuts and Stamp Duty Reductions

  • Property Transfer tax is being reduced from 8% to 5% on the first €400,000 of the property value.

  • Stamp duty is also being reduced from 5% to 1.5% for the first €400,000 of the property value.

  • The above shall also apply for those promise of sales already registered, and even those that are still to be registered; however, the final contract of sale must be made by the end of March 2021.

  • Furthermore, the first-time buyers scheme will be amended so that those who were deprived of the scheme (reduction of stamp duty from 5% to 3.5% on the first €175,000 of the value of the property) because of having other minor property registered in their name, will now also be treated as first-time buyers and be able to benefit from the first-time buyers scheme.

Measures Assisting Businesses

Rent Subsidy for Businesses

An amount of €50 million is being allocated for rent subsidies for businesses. Those businesses categorized in Annex A or Annex B for the wage supplements shall be allocated a grant covering 50% of their rental cost, up to a maximum of €2,500.

Water & Electricity Tariff Subsidy for Businesses

The Government shall provide a subsidy of 50% of the electricity bill for 3 months up to a maximum of €1,500 per applicant.

Micro Invest Tax Credits Converted to Cash Grants 

30% of the tax credits allocated under the Micro Invest Scheme will be converted to cash grants. The cash grant is capped at €2000 for Malta-based businesses and €2500 for Gozo businesses and women-owned businesses.

Licenses Refunds

Refunds will be given for a 1-year license fee for those who paid their MTA or commerce license.

Grants to Cover Professional Fees

A €5000 grant shall be given to cover the costs of professionals to help businesses utilize new methods of operation.

Skills Development Scheme 

A new scheme for those employing less than 50 employees shall be launched to assist and promote more in-house training.

Port Charges Refund

For 6 months, a refund of 33% covering port charges shall be given to those importing merchandise to Malta. Furthermore, a refund of 10% will also be given on container discharge fees on import and export. Both exclude transshipment costs.

Refund of Participation in Foreign Fairs

A refund shall be paid to businesses who incurred costs to participate in foreign fairs that were cancelled due to the pandemic. The refund will cover up to 80% of the expenses.

Digital Promotion Grant 

A grant of up to €10,000 will be given to businesses that incurred expenses to promote their products digitally and internationally.

Export Credit Guarantee Scheme

The Malta Development Bank will provide an export credit guarantee up to a maximum of €10 million for companies seeking to export their products in developing markets.

The Environment – Construction Grants

A €4 million investment aimed for the construction industry to modernize their machinery and make it more efficient and environmentally friendly. The grant has a maximum of €200,000 per applicant.

Measures Aimed to Boost Local Consumption


Retail Vouchers to ALL Maltese residents aged 16 and over.

Those persons over 16 years and residing in Malta will be receiving a €100 voucher (split in five equal vouchers of €20 each), €80 of which can be utilized for holiday accommodation in Malta or Gozo, bars and restaurants whilst €20 can be used in other shops that had to close during the pandemic. The Malta Tourism Authority shall refund the vouchers to the businesses having a license whilst MIMCOL will refund the other businesses. The vouchers will expire at the end of September 2020.

Other Measures

  • Capital Markets – The government will assist as necessary in terms of liquidity and underwriting for bonds to remain successful.

  • Industrial Infrastructure - €400 million shall be allocated to modernize industrial infrastructure. The government will invest 3% of Malta’s GDP over the coming years to modernise industrial estates and create new spaces to be able to attract foreign investment. This is aimed to further enhance Malta’s manufacturing industry.

  • Green Recovery -  Government will work on finalising a plan to implement a low carbon strategy. This will be unveiled in the budget for 2021.

  • Assistance to NGO’s - A €3 million fund is being set up to help NGOs, whose income was severely hit by the impact of COVID-19.

  • Assistance to Homes for the Elderly - €2 million will be allocated to homes of the elderly, to over for additional costs incurred during the pandemic.

The above is a snapshot of the measures as announced. Follow our dedicated COVID-19 page for updates as and when the measure will continue to be clarified.

 

Antoinette-Scerri
Antoinette Scerri
Director, Tax Advisory Services

 

 

Click Below to Download the Latest Post-COVID Economic Recovery Measures.

Economic Regeneration Plan | Post-COVID Economic Recovery Measures

Disclaimer: This publication reflects announcements made during the Post-COVID Economic Recovery Measures speech on the 08th of June 2020. The information contained within this publication should not be deemed to constitute any form of direct and/or indirect advice and is simply limited to a factual replication of the Post-COVID Economic Recovery Measures speech as aforementioned. Nexia BT, its employees, agents and/or representatives shall not be held liable for any direct and/or indirect liability suffered and/or assumed by the reader of this Publication. Readers are encouraged to contact us on tax@nexiabt.com or +35621637778 for comprehensive analysis as to how the relevant measures affect him/her.

We're here to help

Our team will help you deliver results whilst working to the highest professional standards. Nexia BT your reliable partner in Malta.

Get in touch