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Economic Stimulus Package

17-Jun-20

On 8 June 2020, Prime Minister Dr Robert Abela announced Malta’s new economic stimulus package. This package consists of various measures aimed at regenerating the Maltese economy following the impacts of COVID-19. The measures are outlined below:

(1) Wage Supplement Measures

It must first be noted that the current wage supplement measures will continue until the end of June. However, the newly announced wage supplement measures are outlined below in categories. These measures are applicable for the months of July – September 2020.

(2) Operating Expenses Measures

Measures to relieve operating expenses for businesses will apply in the form of grants, subsidies, and refunds. These measures are discussed below.
Rent Refund: Both Annex A and B businesses that have previously been granted the Wage Supplement are eligible to apply for a grant of up to 2,500 euros. Businesses may apply by submitting their lease agreements.

Electricity Bill Refund: Annex A and B businesses will receive an electricity subsidy that equals 50% of their consumption costs for the months of July, August, and September 2020. It is important to note that this is capped at the amount of 1,500 euros per applicant. Further, the amount does not include the payment for the meter.

Business Re-engineering Consultancy: This scheme is aimed at aiding businesses, particularly small businesses, to develop new business plans and technological solutions. This scheme is important because many businesses will now have to make key changes in the way they operate to address the challenges brought by the pandemic. Thus, Malta enterprise will provide up to 5,000 euros for every business, allowing them to embark on a reengineering exercise with approved companies.

Port Charges: There will be a refund of 33% of port charges applicable from June 1st to December 31st, 2020 that are sustained from the import and export of goods [not applicable to trans-shipment activities].

Container Discharge Fees: There will be a refund of 10% of container discharge fees applicable from June 1st to December 31st, 2020 that are sustained from the import and export of goods [not applicable to trans-shipment activities].

Modernisation of Equipment – Construction: Businesses in the construction industry are eligible to receive a grant up to 200,000 euros to modernise their equipment towards modern, more efficient, and environment-friendly machinery. 

Skills Development Scheme: Malta Enterprise is building upon the existing Skills Development Scheme to aid business with less than 50 employees that need assistance to up-skill their workforce. The aim is to advocate for in-house training and skill sharing between the most experienced and younger employees.

(3) Vouchers

Residents of Malta and Gozo who are over 16 will receive a voucher of 100 euros. 80 euros of this voucher may be used at any Malta Tourism Authority licensed accommodation [hotels, holiday homes, and at restaurants and bars], whilst 20 euros of the said vouchers may be used at shops that were closed due to COVID-19 [retail shops]. Vouchers may be used until September 2020.

(4) Property Tax

The stamp duty that applies to buyers and final withholding tax applicable to sellers, will be reduced and will continue to be reduced until March 2021 for property values of up to 400,000 euros. In the case of buyers, the current 5% will drop to 1.5%. In the case of sellers, the current 8% will drop to 5%.

(5) Tax Payments

The tax payment deferral scheme applies until September 2020 and all deferred payments must be settled over 12 months. With that being said, it is important to note that, as of July 1st, deferral does not apply for the settlement of employees’ Final Settlement System tax and social security contributions withheld from wages.

(6) Fuel Prices

As of June 15th, the price of fuel will be decreased by 7 cents per litre. Petrol will decrease to 1.34 euros per litre and diesel will decrease to 1.21 euros per litre.

(7) In-work Benefit

There will be an improvement in the in-work benefit while a supplement of €250 will be given for each family that benefits from the same scheme.

(8) Micro Invest Tax Credit

Businesses which invested during 2019 and which will be receiving a Microinvest tax credit will be able to benefit from a conversion of 30% of these credits into grants. Costs covered include refurbishment and upgrading of offices & factories, investment in machinery and other assets. The grant is capped at 2,000 euros. Note that for businesses operating in Gozo, family business and female owned businesses capping is increased to 2,500 euros.

(9) Wedding Expenses

Couples who had to forfeit deposits on wedding expenses will receive a grant with a max of 2,000 euros.

(10) Homes for the Elderly

2 million euros are being allocated to provide financial assistance in elderly homes.

(11) Bond Issuers

Bond issuers will receive support to make sure their obligations to bondholders are maintained. This consists of a new underwriting facility for private enterprise bonds that will be set up through the Malta Development Bank.

Kindly note that this information has been sourced from research carried out on local media by Parker Randall Turner. The above information is all that we have at hand at the moment. However, we will do our best to keep you informed of any further developments. Furthermore, we will not be held responsible for any inaccuracies resulting from the sources mentioned above.