Businesses will benefit from improved access to finance among new proposals announced by Labour.
In order to foster investment, a new Labour administration will strengthen existing support schemes and launch new ones.
One example is a new financial grant to companies covering 30% of the investment they make in fixed capital to increase their operations. The grant will rise to 40% if the investment is made in the digital, environmental, social, educational, renewable energy fields as well as any investment in Gozo.
Another example is a scheme whereby businesses that reinvest profits in their operations or in new businesses will receive a full refund of the tax paid on that investment.
Another key strand of measures relates to improving the ease of doing business. Just as Labour introduced the right to a basic bank account for individuals, it will now extend this right to self-employed and businesses in all sectors. This will be a game-changer for many start-ups and foreign direct investors in emerging sectors.
This will be a game-changer for many start-ups and foreign direct investors in emerging sectors.
Abela pledged that a new Labour Government will set up a credit review office that reconciles and acts as an arbiter between commercial banks and their customers about loan applications. In the event of a complaint, the office will make its recommendations for the bank’s consideration. This is similar to what happens with the Arbiter for Financial Services in cases relating to personal customers of banks.
A new administration will also simplify processes so that businesses do not need to submit the same documentation several times with different regulatory entities, including due diligence procedures that will in the future be shared across all Government entities. Government will also set up a one-stop shop offering all available assistance for start-ups under one roof.
Malta will be creating an ideal ecosystem for start-ups. A new administration will be designing a legal framework specifically for start-ups to attract indigenous and international start-ups with growth potential. A tax-free financial instrument will be introduced to set up a private equity fund that will then provide capital for local start-ups and small and medium-sized businesses. There will be more help through new tax incentives and seed funding to make more women entrepreneurs. There will also be a start-up visa to facilitate new entrepreneurs to come set up shop in Malta.
The manifesto also prioritises sustainable industry. A new administration will offer free energy audits to micro and small firms, and financial assistance to deliver on the recommendations of these audits. Those enterprises that meet internationally accredited environmental standards will also receive tax credits. Companies that create green jobs will be given a tax credit amounting to a maximum of 75% of wage costs in the first year, 50% in the second year and 25% in the third year. And since our country needs more trained workers for the green economy, Labour has pledged a new tax credit equivalent to the total cost of training workers to have these necessary skills.
Those enterprises that meet internationally accredited environmental standards will also receive tax credits.
This is just a taste of what the Labour manifesto Malta Flimkien includes for businesses. Taken together if these are successfully implemented, this will transform completely the local business environment and reinvigorate the Maltese growth model.
Instead of forcing ESG down the throat of businesses and offering tax relief only after making SMEs go through a process that in Europe is being mandated only for large firms, as the PN is doing, Labour is proposing a very different approach. All firms will be provided tax relief, while SMEs will be helped with ESG issues. Instead of adding further bureaucratic hurdles onto firms, Labour will provide them with the resources and finances to make this challenging transition.