Malta’s Economic Regeneration Plan

Economic Step Forward

On Monday 8th June 2020, The Prime Minister of Malta together with the Minister for Finance and Financial Services and the Minister for Economy, Investment and Small Businesses announced a plan to stimulate and support Malta’s economy focusing primarily on three fundamental pillars being:

1. Reduction in Costs;
2. Stimulation and Boosting of Local demand; and
3. Corporate and Employment support measures

The details of the above have been summarised below:

Wage Supplements

Extension, retention and adjustments

The wage supplements launched earlier this year shall continue to be paid out till end of June 2020, however as from 1st July 2020 the following Wage Supplements shall be made available:

• Same Wage Supplements to continue as per previous scheme up until September 2020 for the following operators:
  • • Tourist Accommodation, Language Schools, Mass Event Organisers, Travel Agencies & Airlines
• Other Operators who previously qualified for the “full wage supplement” benefit under Annex A shall receive reduced wage supplements of:
  • • €600 for Full Timers; and
    • €375 for Part Timers
• Personal Services and other Businesses / Self Employed who depend on local consumption will benefit from the partial Supplement under Annex B; and
• Companies and Self Employed who up until June 2020 received wage supplements under Annex B will continue to receive this suppport till September 2020.

Tax Deferral Scheme

Tax deferrals shall continue to apply until August 2020, with the exception of FSS, NI and Maternity contributions which are expected to be paid in full from 1st July 2020 onwards. All other deferred taxes eligible for the scheme are to be paid by May 2021.

Property Transactions, Taxes and Stamp Duty

A series of benefits applicable to the transfer of properties in Malta have also been launched and consist of the following:

First €400,000 in property value

• Property transfers that are normally taxed at 8% shall now be taxed at 5% on the first €400,000 in value; and
• Stamp Duty shall also be reduced from 5% to 1.5% on the first €400,000 in value

*The above shall be applicable on committed promises of sale that are already registered and those still to be registered, provided final deed of sale is to be concluded by March 2021.

First Time Buyers Scheme – Widening of Eligibility

• The Scheme shall be extended to include previously excluded individuals who were not considered eligible for the scheme due to owning other minor properties.
• The Scheme shall continue to offer a reduced rate of stamp duty from 5% to 3.5% on the first €175,000 in value.

Business Support

The Following Measures are being made available to support businesses:

Rent Subsidy for Business

Businesses that qualified for Annex A or Annex B Supplements, shall be eligible for a grant equivalent to the lower of €2,500 of 50% of Rent Paid

Water & Electricity Bills

A Subsidy is being made available for all businesses covering 50% of Utility Bills for 3 months up to a maximum of €1,500

Conversion of Micro Invest Tax Credits to Grants

30% of Tax Credits received under the Micro Invest Scheme shall be converted to Cash Grants, however capping of said amounts shall apply as following:

• • • Women Owned Businesses: €2,500
    • Malta Based Businesses: €2,000
    • Gozo Based Businesses: €2,500

MTA & Commerce Licences

One Year Licence refund shall be provided to all businesses that have paid their MTA or Commerce Licence

Professional Services Grants

A Grant of €5,000 shall be provided to businesses availing themselves of professional services to help their businesses adopt and utilise new methods of operation

Skills Development & Training

A scheme targeting businesses employing less than 50 employees is to be launched promoting investment in training.

Port Charges Refund & Discharge Fees

• • For a period of 6 months, government shall be providing a refund for 33% of port charges (excludes transhipments); and
  • 10% refund on container discharge fees (excludes transhipments)

Participation in Foreign Fairs

A refund shall be given to businesses who incurred costs to participate in foreign fairs that were cancelled due to Covid-19, this shall be capped at 80% of actual costs incurred.

Digital Promotion Grant

A grant of up to €10,000 shall be given to businesses that incurred expenses to promote their products digitally as well as internationally

Exportation Credit

The Malta Development Bank shall be supporting companies looking to export their products to developing markets, via an export credit guarantee scheme up to a maximum of €10m

Construction Grants

Companies within the construction industry may be eligible for investment aid aimed at upgrading their machinery by way of acquiring new equipment that is more modern, efficient and environmentally friendly.

Local Consumption Boost

Persons over the age of 16 residing in Malta, shall be receiving 5 vouchers of €20 each (€100 in total) to be used as follows:

• €80 within Holiday Accommodation, Bars and Restaurants within Malta & Gozo; and
• €20 within other shops that had to close during the Covid-19 pandemic.

*Operators that receive any such vouchers in lieu of payment shall apply for a cash refund through MTA if licenced by same authority and for those businesses not requiring an MTA licence can apply to MIMCOL for same refund.

Other Support Measures:

Supporting the Capital Markets

The Government will continue to monitor and support the local capital markets via liquidity and bond support measures.

FDI stimulation and Infrastructural investment

Government shall be allocating €400m to upgrade and modernise industrial estates around the Maltese Islands to create new space aimed at attracting Foreign Direct Investment.

Low Carbon Strategy

Efforts will be deployed to finalise a plan aimed to implement a low carbon strategy, this will be expected to be announced during the 2021 Budget presentation.

NGO Support

€3m in funds shall be allocated to support NGOs that were negatively impacted by the Covid-19 pandemic.

Elderly Homes

€2m in funds shall be allocated to the homes of the elderly to cover additional costs incurred during the pandemic.