Issue link: https://maltatoday.uberflip.com/i/1042376
24 BUDGET 2019 OPINION maltatoday | TUESDAY • 23 OCTOBER 2018 READING through the Minister of Finance's Budget speech, I started to get the impression that it was just a Budget for the individual as an employee, a pensioner, student or anyone in need of assistance. But as I continued reading, I found firm messages from government to address new economic areas as well as to give out a reply to certain criticism in the international press. The government made strong messages on measures coming in force to combat tax evasion. But no such new measure will in a way affect the current tax advantages offered by Malta. All such advantages are in line with EU rules and OECD guidelines. The main message directed at the international business community is that Malta as a jurisdiction is open for business. Taking the cue that Malta was the first country to regulate Blockchain, this will be extended further to have regulations into new innovative areas such as Artificial Intelligence and the Internet of Things. The latter depend on human knowledge skills to extend technology with innovative functions to improve the quality of life or work methods. For the next year, the Malta Communications Authority will undertake a feasibility study to introduce 5G, which is a requisite for new technologies. Complementing this will be a new authority called Tech.mt, which will be the vehicle to co-ordinate such international promotion initiatives. Building on the success of the gaming industry, next year the government will be marketing to attract eSports to Malta, which involve simulated video game completions that will be organised and that will attract a new breed of professional players. Until now we have got used to the hundreds who f lock to Malta to play in international poker tournaments. Now a new market niche will be created. Concurrently the government is targeting international start-ups to come to Malta which may even attract developers of such video games for eSports developments. Once again, the government will try to kick-start the logistical sector by enacting new legislation for Free Zones. Moreover, in the financial services sector the government will facilitate the registration of Real Estate Investment Trusts to be negotiated on the Malta Stock Exchange. This is a financial instrument that attracts a sophisticated type of investor. The minister's speech did not only focus on attracting new businesses but was also aimed at assisting the private sector to defend its patch. In fact, a business advisory service will be provided to SMEs which will be affected by Brexit. Concurrently the government is on full throttle to continue to increase the number of tourists visiting Malta, and it is targeting another quarter of a million of additional visitors through new air route links. All the measures announced are aimed at sustaining the economic growth which the country has experienced in the last years. In fact, Malta outperforms the EU average in economic growth, enjoys a mere 3.8% unemployment rate, and 90% of new jobs created last year were by the private sector. Scicluna not only stressed that this is a Budget with no new tax that will yet again register a surplus in government's coffers, but also mentioned a number of initiatives for local entrepreneurs to possibly participate in. A detail is government's initiative to have a Gozo aquatic centre which will increase the numbers in the sports tourism niche, and the new visitors' destination will be the sister island. Other economic growth initiatives should be in the offing from ideas which the Competitiveness Board within the MCSD will generate. These should continue to enhance the growth experienced in financial services, iGaming and tourism. This time, the government took care to address past criticism that not much was done to assist fishermen. A first is the planned assistance to be given for the restoration of 20-year plus fishing boats. Whilst workers on the minimum wage will enjoy a higher basic salary, this will come at a slight cost to the employer, who will also have to bear the cost of an additional vacation leave for the employees. In order to create jobs in Gozo the government intends to continue to extend the scheme of subsidy of up to 30% of the salary capped at €6,000. And for all employers who care for their workers, and start off a voluntary occupational pension scheme, these will enjoy a tax reduction of the cost up to 25%. A new measure is for self- employed who for a reason revert to the dole. For the first time, this category will enjoy unemployment benefits. Though this is commendable, it is hoped that all will participate in our economy's growth and not have to resort to it. Another new measure is for landlords to enter into a government program for housing, and then after seven years if they opt to sell, they will have a revised capital gains tax. In 2019, family businesses which are transferred from a generation to another will continue to enjoy a reduced tax rate. This measure was introduced for the first time this year. The reason for its extension is probably not only the result of its success, but also since such a transfer entails 'cleaning up' the books of accounts for proper valuations. Overall, the mantra of the government was announced to be a better quality of life for families, not only through increases in COLA for employees, increases in pensions and social benefits, but also through economic growth to be generated from the traditional pillars and by targeting innovative niches. Stephen Muscat Still open for business The minister's speech did not only focus on attracting new businesses but was also aimed at assisting the private sector to defend its patch