Government Recovery Plan – COVID-19

The Mal­tese Gov­ern­ment has announced a €900 mil­lion recov­ery plan in view of the Covid-19 impact, a plan which is aimed at restor­ing the Mal­tese econ­o­my through a reduc­tion of expens­es for busi­ness­es, the issu­ing of more financ­ing pack­ages, boost­ing domes­tic demand and pro­vid­ing direct sup­port to indus­tries whilst also pro­mot­ing work.

The fol­low­ing is a brief overview of the mea­sures announced dur­ing yesterday’s con­fer­ence:

Covid Wage Supplement

The Covid Wage Sup­ple­ment which was intro­duced in March and issued to those busi­ness and enter­pris­es which were impact­ed by Covid-19, will be retained up to the end of Sep­tem­ber 2020. The same rate of €800 and €500 for full timers and part-timers, respec­tive­ly, is being retained for the tourism indus­try while for oth­er indus­tries which will remain on Annex A, the rate of €600 and €375 for full timers and part-timers, respec­tive­ly, shall apply. Some of the indus­tries which were pre­vi­ous­ly list­ed on Annex A, will now be con­sid­ered to be eli­gi­ble for a sup­ple­ment under Annex B.

Fur­ther­more, the Gov­ern­ment announced that stu­dents and pen­sion­ers who work part-time, will now be eli­gi­ble for the wage sup­ple­ment.

Electricity Subsidy for Businesses

For the months of July, August and Sep­tem­ber, the Gov­ern­ment will be sub­si­dis­ing elec­tric­i­ty bills of busi­ness by 50%, up to a max­i­mum of €1,500 per appli­cant. This will apply to all those indus­tries which were includ­ed in Annex A and Annex B.

Fuel Price Reduction

The Gov­ern­ment announced that the prices of petrol and diesel will be reduced by €0.07 per litre. This means that from Mon­day 15th June, the price of petrol will be at €1.34 per litre and that of diesel will be at €1.21 per litre.

Tax Cut on Property Transfers

As part of the recov­ery plan, the Gov­ern­ment is also aim­ing to boost the prop­er­ty mar­ket. For this mat­ter, both buy­ers and sell­ers will ben­e­fit from reduced stamp duty on prop­er­ty trans­fers.

Buy­ers will now be pay­ing 1.5% in tax and sell­ers 5% on prop­er­ty trans­fers. There­fore, a reduc­tion of 3.5% and 3% applies for buy­ers and sell­ers, respec­tive­ly.

The rates are applic­a­ble for res­i­den­tial prop­er­ties only and are capped at a max­i­mum of €400,000. This mea­sure shall remain in place until end of March 2021.

First Time Buyers

Fur­ther­more, in rela­tion to boost­ing the prop­er­ty mar­ket, the Gov­ern­ment announced that the cur­rent law reg­u­lat­ing the First Time Buy­ers Scheme will be amend­ed accord­ing­ly to allow for those who had pre­vi­ous­ly bought a prop­er­ty which is not res­i­den­tial, to be able to ben­e­fit from the scheme as First Time Buy­ers when buy­ing their first res­i­den­tial prop­er­ty.

Construction Industry

The Gov­ern­ment stat­ed that the bud­get for the mod­erni­sa­tion of the con­struc­tion equip­ment shall be increased to €4 mil­lion.

Rent Subsidy for Businesses

There shall be a grant, capped at a max­i­mum of €2,500 per appli­cant, to help com­pa­nies cov­er their com­mer­cial rental fees. This grant will be applic­a­ble to those enti­ties list­ed on both Annex A and Annex B.

Tax Deferrals

Com­pa­nies will con­tin­ue to ben­e­fit from the tax defer­ral scheme which was announced in March. Such tax defer­rals will be extend­ed until June 2020. The deferred tax shall be paid by May 2021 and no inter­est shall be charged on such deferred tax.

As for Nation­al Insur­ance, Mater­ni­ty Con­tri­bu­tions and Income Tax, the Gov­ern­ment announced that these will start being paid again from the 1st July 2020.

Tax Credits

The tax cred­its issued in rela­tion to the micro invest scheme will be adjust­ed in order to have 30% of such cred­its issued in grants. Mal­tese Busi­ness will be eli­gi­ble for grants of up to €2,000 whilst Busi­ness­es locat­ed in Gozo will be eli­gi­ble for grants of up to €2,500.

Tax Refunds (Individuals)

€11.5 mil­lion will be used to cater for the refund of indi­vid­ual income tax. This mea­sure had already been in place, how­ev­er, the Gov­ern­ment announced that it will be issued once more in the com­ing days.

In-house Employee Training

The bud­get of the cur­rent scheme admin­is­tered by Mal­ta Enter­prise, which aids com­pa­nies to cater for in-house train­ing, will be increased by a fur­ther €5 mil­lion.

Vouchers

All those aged 16 and over shall be receiv­ing €100 in vouch­ers which are meant to be spent in hotels, bars and restau­rants. One of the vouch­ers may be spent at retail out­lets which were closed dur­ing the past months due to the pan­dem­ic.

Wedding Expense Compensation

For all the cou­ples that incurred extra expens­es due to hav­ing to post­pone their wed­ding for a lat­er date, the Gov­ern­ment will be refund­ing a por­tion of such expens­es. The refund is capped at €2,000 based on the addi­tion­al expens­es incurred by such cou­ples.

Fairs Refund

Up to 80% of expens­es incurred by busi­ness who were par­tic­i­pat­ing in inter­na­tion­al fairs which were can­celled due to the pan­dem­ic shall be refund­ed by the Gov­ern­ment.

Improved in-work benefits

All fam­i­lies who cur­rent­ly receive the in-work ben­e­fit will now be receiv­ing a one time grant of €250. The cur­rent thresh­olds will be amend­ed to include more fam­i­lies whilst the cur­rent grant will also be increased.

Licences fees waived

As a mea­sure to help busi­ness­es with­in the tourism indus­try, the Gov­ern­ment announced that all busi­ness who paid their com­mer­cial licences to the Mal­ta Tourism Author­i­ty will have next years’ licence fee waived. For those busi­ness who still have not paid their com­mer­cial licence, the licence fee for this year shall be waived.

Business Fund and Advertising

Mal­ta Enter­prise shall be man­ag­ing a fund aimed at aid­ing busi­ness­es who wish to re-mod­el their busi­ness in order to meet the neces­si­ties of the cur­rent cir­cum­stances. The grants from this fund shall be capped at €5,000 per com­pa­ny.

There shall also be allo­cat­ed €5 mil­lion to be used by com­pa­nies who want to adver­tise their prod­ucts both local­ly and abroad.

Refund of Port Charges, Export Promotion and Credit Guarantee

The Gov­ern­ment shall be refund­ing 33% of port charges and 10% of con­tain­er dis­charge fees. Tran­ship­ment activ­i­ties are exclud­ed from both schemes.

There shall also be allo­cat­ed €400,000 to Trade Mal­ta which will be used to refund com­pa­nies for up to 50% of expens­es in rela­tion to dig­i­tal mar­ket­ing.

Fur­ther­more, an export cred­it guar­an­tee will be pro­vid­ed to com­pa­nies by the Mal­ta Devel­op­ment Bank. This guar­an­tee shall be capped at €10,000,000 and is aimed for those busi­ness­es who seek to export their prod­ucts in new mar­kets.

The Gov­ern­ment revealed oth­er invest­ments which may not be direct­ly relat­ed to the Pan­dem­ic, such as an invest­ment of €400 mil­lion in indus­tri­al facil­i­ties and infra­struc­ture aimed at attract­ing for­eign invest­ment.

The above-men­tioned mea­sures will help to enhance Malta’s econ­o­my whilst adjust­ing to the new cir­cum­stances. The Prime Min­is­ter stat­ed that this is a strate­gic plan with a vision for a bet­ter tomor­row.

You may con­tact us on info@drwerner.com or +356 213 777 00 should you require any fur­ther infor­ma­tion on the above or any infor­ma­tion regard­ing Gov­ern­ment Aid in rela­tion to COVID-19 mea­sures.

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