Issue link: https://maltatoday.uberflip.com/i/1257572
2 maltatoday | WEDNESDAY • 10 JUNE 2020 NEWS EDWARD Scicluna has likened government's post-COVID re- covery plan to a "bridge loan", intended to cushion the blow and ignite a spark after three months of partial lockdown. With coronavirus restrictions on retail and other activities now lifted, normality is making a slow return but much depends on people's behaviour and their appetite to spend. Government's plan tries to encourage consumer spending by dishing out €34 million in vouchers that can be spent at restaurants, bars, hotels and re- tail outlets that were forced shut. The vouchers that every adult aged 16 and over will receive are not a gift but a targeted econom- ic measure to generate business in the tourism sector that has sustained the hardest blow. The rationale behind the pro- posal, which was initially made by Nationalist MP Hermann Schiavone, is to inject some life in the sector, which will remain hampered by a lack of tourists for quite some time. In line with previous Sciclu- na budgets, every measure an- nounced on Monday is targeted to create a defined economic im- pact that will hopefully generate a ripple effect. This includes the three-month electricity and rental subsidies for businesses that were impact- ed by COVID-19. Another targeted measure is the tax reduction on property sales and purchases, which tries to ensure the sector does not ex- perience a prolonged slow down, while ensuring that more money is left in people's pockets. But there is also the specific measure to refund additional expenses sustained by couples who had to postpone their wed- ding plans because of the pan- demic. This measure will impact few people but is in line with previous budget strategies that included minor interventions targeting very specific situations and groups. On a more macro-level, the proposed €400 million spend to rejig industrial estates and cre- ate more factory space aims to prepare the country for future investments in manufacturing. WHAT'S IN IT FOR FAMILIES Fuel price cut The excise tax on petrol and diesel will be reduced by 7c per litre. The pump price of petrol will be €1.34 per litre and that of diesel €1.21. This will come into effect on Monday, 15 June. €100 retail vouchers Every person aged 16 and over will receive €100 in vouchers. The vouchers will be in multi- ples of €20. Four vouchers can be spent in hotels, restaurants and bars, while one voucher can be spent at retail outlets that were force- fully closed during the pandem- ic. This will cost €34 million and vouchers will remain valid until the end of September. Property tax cut Property buyers and sellers will benefit from a cut in capital gains tax. Buyers will have their tax cut from 5% to 1.5%, and sellers will see their tax decrease from 8% to 5%. The rates will apply on the capital value up to €400,000. The reduced rates will apply on all residential property contracts signed until the end of March next year. This measure will cost €32 mil- lion. First time buyers The law will be amended to al- low first time residential buyers to benefit from the specific rates even if they have a property to their name. Wedding expense refunds To mitigate the burden in- curred by couples who had to postpone their wedding this year because of COVID-19, govern- ment will refund up to a maxi- mum of €2,000 on additional expenses incurred. Low income families get money boost The in-work benefit thresholds will be extended and beneficiar- ies will also get a higher amount per child. Families receiving the in-work benefit will also receive a one-off grant of €250. Wage supplements for stu- dents, elderly From now until end of Sep- tember, students and pensioners who work part-time will receive the wage supplement, which was denied from them when it was introduced in March. Tax refunds The budget measure to refund part of an individual's income tax will kick in over the coming days. Some 210,000 workers will receive €11.5 million in tax re- funds. WHAT'S IN IT FOR BUSINESSES Wage supplement tapering off The measure by which govern- ment has been financing €800 per month per employee will be retained until the end of Sep- tember for businesses in tourist accommodation, travel agencies, language schools, organisers of mass events and air transport. For other companies that were receiving €800 but have now re- started with difficulty, the wage supplement will go down to €600 per month per employee until the end of September. Other companies that have re- opened and were receiving €800 will be shifted to Annex B and start receiving €160 per month. The new rates will kick in from 1 July. Electricity subsidy for business- es The government will subsidise 50% of the electricity cost, up to €1,500, for the months of Ju- ly, August and September. The measure will cost government €30 million. Applies to commercial entities that were on Annex A and An- nex B. Rent subsidy for companies Government will pay out a grant, up to a maximum of €2,500, to help commercial en- tities cover rental obligations. This measure will cost €50 mil- lion. Applies to commercial entities that were on Annex A and An- nex B. Tax deferrals Company tax deferrals have been extended for June. National Insurance, income tax and ma- ternity contributions will start to be paid from 1 July. Other taxes due by companies have been deferred to the end of August. Companies can pay the de- ferred tax by May next year, with no interest charged. Commercial licences All licences paid to the Mal- ta Tourism Authority and the Commerce Department for 2020 will be waived. Those who have paid their licence will get a waiv- er in the next year. This measure will cost govern- ment €5 million. Tax credits to grants Malta Enterprise's micro invest scheme will see 30% of credits to businesses transformed into grants. The limit will be €2,000 for Maltese businesses, and €2,500 for Gozitan businesses. This will cost €5 million. Re-modelling business fund Malta Enterprise will manage a fund of €2.5 million intended for businesses that plan on re-engi- neering their model to adapt to new circumstances. Each com- pany will be eligible for a maxi- mum €5,000. Higher budget for skills scheme The Malta Enterprise scheme intended to help companies fi- A recovery plan with a wide From the little things that impact individual cases like wedding refunds to the €400 million investment to create factory spaces, government's recovery plan tries to ignite a summer spark. KURT SANSONE reports