Economic stimulus package

8 June 2020

On the 8 June, the Prime Minister, the Minister for Finance and Financial Services and the Minister for the Economy, Investment and Small Businesses announced a package of measures intended to regenerate the economy following the COVID-19 pandemic and this by implementing measures targeted to reduce operational costs of businesses, measures to incentivise domestic consumption and measures to support investment.

A summary of these measures is set out below.

Extension of COVID-19 Wage Supplement

The current COVID-19 wage supplement will be extended in the following manner:

  • Sectors that are directly dependent on the tourism sector will continue to receive the current wage supplement of €800 per month in the case of full timers and €500 per month in the case of part timers, until September.
  • Personal and professional service providers previously included under Annex A will continue to receive a wage supplement until the end of September, but will as from 1 July be considered as Annex B businesses.
  • The wage supplement for other Annex A businesses (i.e. those that are not directly dependent on the tourism sector or personal service providers) will as from 1 July be reduced to €600 (from €800) per month (for full timers) and to €375 (from €500) per month (for part timers).  Such supplement will continue to be paid until the end of September. 
  • Annex B businesses will continue receiving the same amount of wage supplement until the end of September.
  • Pensioners and students receiving other sources of income to supplement their pension/stipend and who were previously not eligible for the wage supplement will now be entitled to receive a wage supplement until the end of September. 
Wage supplement

Measures targeting certain operating expenses for businesses

  • Annex A and Annex B businesses will be granted the following subsidies:
    • Rent subsidy: A cash sum of up to €2,500 to cover rental costs.  
    • Electricity subsidy: A subsidy equivalent to 50% of the electricity consumption costs (capped at €1,500) will be paid to such businesses for the months of July, August and September.  
  • Grants of up to €5,000 to subsidise consultancy fees incurred to assist with business reengineering.
  • A new Skills Development Scheme will be launched for businesses employing less than 50 employees.
small business
  • A full refund of trade licence / permits paid during 2020 by businesses that were forced to close down during the pandemic.
  • For the period 1 June to 31 December 2020, a refund of 33% of port charges and 10% in container discharge fees incurred on the import and export of goods. Such aid will not cover transhipment activities. 
  • Grants of up to €10,000, being a reimbursement of up to 80% of costs incurred in participating in fairs abroad.
  • Granting of export credit guarantees.
  • A grant of up to €200,000 to businesses in the construction industry for the purposes of modernising their machinery and equipment.
export credit guarantee

Other measures

MicroInvest Tax Credits

30% of MicroInvest tax credits available to businesses during 2020 will be converted into cash grants up to a maximum of €2,000. The capping will be increased to €2,500 for undertakings operating in Gozo and for female-owned undertakings.

View more

Property-related tax measures

The Final Withholding Tax rate on sale of property will be reduced from 8% to 5% and stamp duty rate on acquisition of property will be reduced from 5% to 1.5%. In both cases, such reduction applies on the first €400,000 of the value of the property. This reduction applies where the final deed of sale is published by the end of March 2021. 

This reduction will also apply to property transfers where a promise of sale agreement has already been concluded.

Possible relaxation of conditions related to the exemption from stamp duty applicable to first time property buyers.

View more

Grant of €100 voucher to every person

Maltese and Gozitan resident persons over 16 years of age will be granted vouchers for a total of €100. €80 of such vouchers can be used on services provided by MTA licensed businesses (such as hotels, restaurants and bars) and the remaining €20 in shops which were closed by order of the Superintendent of Public Health during the COVID-19 period, such as retail shops. The vouchers will be valid until September.

View more

Reduction in the prices of fuel

With effect from Monday 15 June, petrol and diesel prices will be reduced by 7 cents per litre. Consequently, the price of petrol will be reduced to €1.34 per litre whilst that of diesel will be reduced to €1.21 per litre. 

 

View more

Deferral of tax payments

The tax payment deferral scheme will be retained until September, with the deferred payments then being required to be settled over a period of 12 months. 

However, as from 1 July no deferral will be allowed for the settlement of employees’ Final Settlement System tax and social security contributions withheld from wages. 

 

View more

In-work benefit

The maximum in-work benefit given to encourage parents to go to work will be increased to €1,400 per child (where both parents work) or €630 per child (where only one parent works or for single parents).

In addition, a one time supplementary in-work benefit amounting to €250 will also be given to each family that is already currently receiving the in-work benefit.

View more

Other

  • A grant of up to €2,000 per couple to fund certain forfeited deposits on wedding expenses.
  • Financial assistance to old people’s homes.
  • Support to bond issuers to ensure that their obligations to bondholders are upheld. The support includes the underwriting of bond issues by the Government and bank support.

View more

How can we help?

The details of these measures are still being communicated and further clarifications will need to be sought. We are continuing to follow developments and will provide updates as these become available.

In the meantime, please do not hesitate to contact one of our specialists for further information or should you wish to discuss the effect of these measures in your specific circumstances or in those of your business/enterprise.

Click on a Partners' name to send an email.

At the back, from left to right:
Steve GingellDavid FerryMirko Rapa and David Valenzia

In front, from right to left:
Neville GattBernard Attard and Mark Lautier 

Follow us

Subscribe to the PwC Thought Leadership Newsletters / Alerts

PwC Malta engages through regular publications on relevant issues covering accounting, income tax, VAT, regulatory and industry specific topics.

Required fields are marked with an asterisk(*)

Please tick as appropriate

 
 

Hide