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Malta Budget 2021 - An Overview

20/10/2020

With the COVID-19 pandemic continuing to act as a tax on human activities, various economies worldwide have been negatively effected, including Malta's. On Monday 19th October, Minister of Finance Prof. Edward Scicluna announced various key measures as part of the 2021 budget in a bid to minimize this negative impact on the country's economy.

A rundown of 2020

Malta is expecting a reduction of 7.4% in its GDP over 2019, which is expected to stand at €12.5bn.
The deficit is expected to be around 9.4% of the GDP. A significant decrease from the 1.4% surplus expected prior to the pandemic.
Debt is set to increase to 55% of the GDP in 2020.
Tourism sector took the hardest hit with inbound tourists, up to July 2020, downing to 419k from the recorded 1.5m in the previous year.
Unemployment rate as at August 2020 stood at 4.1%, a rate which is still significantly below the EU average (8.1%).
The 12-month moving average inflation rate in August 2020 stood at 1.1%.

Forecast for 2021

A recovery of the economy is expected in 2021 with a growth of 5% in real terms and 6.4% in nominal terms.
This growth is excepted to generate 7.5% in investment and 3.7% in private consumption.
Exports set to increase by 5.5%.
An increase of 2.3% in jobs is expected next year with unemployment set to remain hovering around 4%.

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COVID-19 - Malta Financial aid packages

25/3/2020

First and second financial aid packages - A recap

In the first and second financial aid packages launched earlier last week, the government announced various measures to aid business battle the economic slowdown resulting from the COVID-19 worldwide pandemic.

Here is a recap of all the support measures and fiscal assistance published so far;

Deferral of tax payments attributed to national insurance (social security contributions), income taxes and VAT falling due on March and April 2020;
Temporary increase in unemployment benefit of €800 for employees who suffered job losses as from 9th March 2020;
Fiscal incentives to businesses to support teleworking activities;
Grant of €350 per employee to businesses that have had employees on mandatory quarantine;
€750M in soft loans for businesses to finance operations;
€150M in bank guarantees;
€210M of funds to cover expenditure arising due to the COVID-19 outbreak;
Three-month moratorium for both personal and business loans;
The suspension of recruitment of third-country nationals with only highly-skilled applications being considered;
€800 monthly benefit (for up to two months) to families with school children and were both parents work, where due to the current situation, one of the parents was unable to work remotely and thus was required to temporary stop from work to take care of the children;
€800 monthly benefit to persons with disabilities who are particularly vulnerable to the virus and therefore had to stop working following the outbreak;
Increase in rent subsidies where a family member living in subsidised rental accommodation suffered termination due to the COVID-19 crisis;

Third financial aid package

Yesterday evening, Maltese Prime Minister Dr. Robert Abela announced the third financial package and measures in a bid to further the support towards businesses and employees adversely affected by the novel COVID-19 viral pandemic.

The third financial package is estimated to cost around €70M per month. The measures will apply retrospectively as from 9th March 2020 and the amount of support will be dependent on the extent to which the business in the respective sector has been hit.

Financial aid to critically hit sectors

Sectors involved;

Specific wholesale activities
Specific retail activities
Travel agencies, tour operators and related activities
Tourist accommodation
Food and beverage sector
Rental and leasing of motor vehicles
Employment activities
Security and investigation activities
Service to buildings
Transportation
Creative, arts and entertainment activities
Personal services activities

All business falling under one of the sectors listed, the government is financing up to €800 per month of each employee's salary.

In cases where the salary exceeds the stipulated amount of €800, the employer is expected to pay the remainder of the salary. In cases where the employer is not able to cover the remainder part of the salary up to at least €1,200, the employer is obliged to notify the Department of Industrial and Employment Relations and an agreement will be reached with the involvement of the unions and the respective employees.

This assistance also applies to part-time and self-employed individuals working in any of the listed sectors. Part-timers assistance will be calculated on a pro-rata basis deemed at a monthly salary of €500.

Financial aid to Less critically hit sectors

Sectors involved;

Manufacturing
Part of the wholesale sector
Part of the retail sector
Warehousing
Information

Business operating within these sectors will have one day's salary per week covered by the government. This is based on a monthly salary of €800 per employee.

This measure will cover approximately 50,000 employees, costing an approximate of €17M per month and is applicable for both employed as well as self-employed individuals.

Do you have any questions?

As further details, including terms and conditions, are still emerging, further clarifications will need to be sought on the fiscal measures. We are continuing to follow the developments and will provide further details as these become available.

In the meantime, for any clarifications on how these measure impact your business/enterprise and for assistance in applying and benefiting from any of the above listed measures, you may contact us by sending us an email on info@businessglobalmt.mt.

Announcements - COVID-19 (coronavirus)

24/3/2020

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In light of the unprecedented situation attributable to the novel COVID-19 virus, we have taken a number of steps and measures to safeguard the health of our team members, clientele, partners and community in general.

In line with our health policy as well as directives and guidelines issued by the Malta Health directorate, the measures adopted include;

The temporary suspension of one-to-one meetings both at our offices as well as client's premises;
All meetings and communication are being done through electronic means and video-conferencing
All documentation, unless otherwise strictly necessary and instructed by us, is to reach us through electronics methods and cloud software.
In the event of hard copies being required, documentation is to be mailed to our offices or forwarded by means of a courier.
Clients are advised to avoid settling invoices by means of cheque payments and are urged to utilise electronic payment methods to settle such invoices.
Most of our staff will be working remotely until further notice is communicated through the Business Global MT website or official social pages, and residual staff is operating behind closed doors. Consequently, walk-in clients are currently advised to contact us via our communication channels and refrain from physically visiting our offices.

In these uncertain times, we strive to maintain the highest level of response and diligence towards our clients and request the cooperation of our partners and customers in aiding us delivering our service to you.

If you have any further queries, you may contact us by clicking this link.

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<<Previous

Malta Budget 2021 - An Overview

A rundown of 2020

Forecast for 2021

COVID-19 - Malta Financial aid packages

First and second financial aid packages - A recap

Third financial aid package

Financial aid to critically hit sectors

Financial aid to Less critically hit sectors

Do you have any questions?

Announcements - COVID-19 (coronavirus)

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