The Chamber of SMEs has made it clear that it will accept the cost of living adjustment system (COLA) for what it is, even if it increases significantly. However, to combat this, she proposes a tax reform to further support SMEs.

The reform would include a reduction in corporate tax to 15% to encourage business and increase the balance between local and foreign companies. The reform will also include the widening of tax brackets for individuals, which will help to reduce the pressure linked to the cost of living.

In addition, the chamber asks to reduce the percentage of VAT. He said that due to rising prices, the government can reduce VAT and still earn the same amount of money as before. It also calls on the government to completely eliminate VAT on specific goods or services, such as locally made crafts and artwork.

The chamber also said that “excise duty is an unfair hidden tax”, therefore it should be removed.

It also calls for a reform of the pension system to be able to guarantee a reasonable public pension.

Through the tax reform, the chamber also wishes to address the 6/7 tax refund disparity. This refers to companies that are owned by a foreign shareholder or have a holding company in Malta. They take advantage of this disparity because they pay up to 30% less tax, depending on the chamber. Through tax reform, the chamber wants to remedy this problem in order to have a level playing field.

The proposals also aimed to take the yachting industry to the next level. This would involve recognition of the urgent need for a “full-fledged marina on Manoel Island, to draw more attention to super yachts”. The Chamber praised the development of the Midi “definitely boosting the yachting sector which will significantly help the Maltese economy”.

The 2023 budget proposals the chamber presented were all based on a survey it conducted to understand the key issues facing SMEs.

A survey conducted for these proposals revealed that more than 40% of respondents had to increase their wages over the past 12 months by up to 15%.

The survey also revealed that companies were mainly struggling with a shortage of labor and low-skilled workers.

It was further revealed that 49% of the respondents lost employees in the last 12 months. The main reasons were either because there were better offers from the private sector or because they went to work for the government.

As a result, in his proposals he calls for limiting employment in the public sector because it is “grossly overstaffed and lacking in productivity”. In addition, he proposes to implement a secondment plan so that more employees work in the private sector.

It also calls for the establishment of commercial programs. People who don’t want a standard education can learn specific trades that would make them skilled and ready for industry, he said.

He also stressed the importance of foreigners working in the country. Therefore, the Chamber proposes a rental voucher system that would last for at least two years, to attract more foreign nationals.

It also offers an efficient system for recruiting third-country nationals. This would involve digitizing the Visa process to make it much more efficient.

As for business incentive schemes, he suggests improving Micro Invest. This will include making 50% of the eligible tax credit convertible into a grant, up to €5,000 and extending the duration of the tax credit to 5 years. It will also include increases to the incentive cap and the inclusion of short-term continuing professional development courses as an eligible cost.

As for unfair competition, the Chamber requests the use of a scanner at the exit of the Malta – Sicily catamaran, so that goods purchased in Sicily which are taxable can be identified.

It also calls for the creation of a public procurement mediator who will be independent and able to scrutinize calls for tenders. Along with this, he asks to remove the financial requirements from the tender, they should only be required after winning the tender, he said.

Additionally, he wants there to be more incentives to move away from cash and towards electronic payments for businesses.

Regarding import disruptions and challenges, the chamber proposes that VAT and customs duties be calculated only on the cost of the goods, not on the shipping costs.

It also proposes a reform of the rent subsidy regime. This will include the double capping of aid from €25,000 to €50,000 and the removal of the cap at 100 employees to make it more accessible to all sizes of business.

The chamber also calls for an independent review of customs procedures and consideration of import costs and Brexit at EU level.

The Chamber also wanted to emphasize export support by subsidizing export costs through tax credits.

To combat bureaucracy, he proposes to abolish audit requirements for micro-SMEs with a turnover of less than €500,000. It also proposes to revise Malta’s business register fees. The Chamber said that, for example, if companies submit their beneficial ownership document late, they face a €500 fine.

The chamber also wants to fight against banking domination and increase its accountability. He said that some banks make decisions against the interest of their users to make profit.

He also stressed that to combat the impact of greylisting, Malta must strive to become a “centre of excellence” for its anti-money laundering sector.

The Chamber pointed out that the country’s main problem is overdevelopment, which has numbed Malta. He feels that although Malta is doing well in tourism, Malta needs a more sustainable and competitive plan.

It offers a quality strategy for Malta which addresses development planning, traffic issues and safety and security.

To improve tourism, he suggests that Malta works on a strategy.

As for scooters, he proposes that technology to help govern scooters be implemented.

In the case of education, the chamber calls for curriculum updates and fully funded training programs.

The chamber has also shown its interest in a carbon neutral strategy which would include the introduction of electric vehicles and charging stations even accessible to companies, and the possibility for companies to replace their vehicles to be more respectful of the environment. .

As for renewable energies, the chamber calls for residential green investments. Similar to grants, this will allow businesses to use energy-efficient infrastructure.

The Chamber is also proposing incentives for Gozo which would include improving transport and connectivity by restarting the air link to Malta and reducing the cost for Maltese residents to travel to Gozo with electric vehicles. As for infrastructure, it offers a multi-storey car park in Victoria, the extension of Mgarr Harbor and a new hospital for the island to complement the Queen Mary University of London campus in Gozo.