This article was published on 11 June 2020 in Corriere di Malta newspaper
‘A Better Tomorrow.’ The Government’s new measures to boost the economy
A couple of months ago we anticipated that new governmental measures would be launched to support the restart of the economy. Such new measures complement those already approved in recent months and are all in response of the crisis caused by COVID-19.
The Prime Minister has in fact just announced a series of new measures to enable the economy to recover rapidly in the wake of the crisis caused by COVID-19 by putting in place a EUR 900 million package partly designed to support and develop businesses.
The relaunch plan under the name “A Better Tomorrow” is based on three main pillars:
- Reduce costs for companies and support them with new funding.
- Promote domestic demand by encouraging consumption.
- Provide direct support to companies by encouraging work.
In this article we will examine in detail why these measures are relevant for businesses. Please notice that our analysis is based on the first official information released by the Government. It will take a few more days for the Government to announce further application provisions.
In any case, at present, the relevant measures are as follows:
- The wage supplement already provided by the first COVID-19 measures will remain unchanged until September 2020 and tourism companies will continue to receive the allowance of 800 euros per month for each employee in the case of full-time work and 500 euros for part-time employees. The sectors concerned are tourist accommodation, travel agencies, language schools, event organisation and air transport. Other companies that do not belong to the tourism sector, which are already included in Annex A, will receive a total of 600 euros for each full-time employee and 375 for part-time employees from July to September 2020;
- Reimbursement of 50% of electricity bills paid by companies for three months (July, August and September) up to a maximum of 1,500 euros per applicant;
- Companies listed in Annex A and B may benefit from a concession of up to 2,500 euros for the cost of renting commercial space for July, August and September;
- The deferral regime for the payment of taxes will be maintained until September 2020, with deferred payments to be settled for a period of 12 months. From 1 July, no deferral will be allowed for the payment of tax and social security contributions established by the “Final Settlement System tax and social security” withheld from wages;
- Those who have invested in their activities will be helped by converting up to 30% of tax credits through the Microinvest programme into cash grant. A total of 5 million euros will be distributed. Businesses in Malta will receive a maximum of 2,000 euros, while companies in Gozo and those run by women will receive up to 2,500 euros;
- Financing of 5,000 euros per company, especially small ones, to develop new business plans an re-engineering their business;
- Funding for employee training for companies employing less than 50 people with an endowment of EUR 5 million for the current Skills Development Scheme run by Malta Enterprise;
- A refund of 33% will be granted in port taxes for a period of 6 months for those ships carrying goods to Malta excluding transfer operations;
- A 10% refund will be granted for a period of 6 months in container discharge fees on import and export of goods, but not for transhipment operations;
- Up to 10,000 euros will be granted aid to companies investing in digital promotion campaigns for new foreign markets, while up to 80% of the costs incurred by companies for participation in international trade fairs that have been cancelled will be reimbursed;
- Aid, coordinated by the Malta Development Bank, is planned for those companies looking to new markets with an endowment of EUR 10 million to establish an export credit guarantee system;
- 4 million has been allocated to enable the construction industry to modernise its machinery in order to make them more efficient and environmentally friendly. Contributions of up to 200,000 euros will be made available.
This set of measure is the largest injection of funds the Government has ever made in Malta’s history. In the coming days we shall keep you updated on any relevant news and on the implementation procedures of the measures described above.
Please do not hesitate to contact us should you require any assistance.
Stefano De Stalis
European Affairs and State Aid Manager