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BUSINESS TODAY 24 November 2022

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2 NEWS 24.11.2022 During the first half of 2022, the Maltese economy grew by 8.5 per cent in real terms over the corresponding period of last year. Growth in the first half of 2022 was relatively balanced, driven by domestic demand, contributing 4.9 percentage points, and net exports, which contributed 3.9 percentage points. In nominal terms, total income grew by 13.3 per cent, mainly reflecting a 15.9 per cent (or €527.9 million) growth in gross operating surplus, 8.0 per cent (or €258.9 million) increase in compensation of employees, and 33.7 per cent (or €142.8 million) growth in taxes less subsidies on production and imports. economy TOTAL guests in collective ac- commodation establishments during the third quarter of 2022 stood at 574,067 while total nights spent amounted to 2,930,893. Data published by the Nation- al Statistics Office show that in the third quarter of 2022, the largest share of guest nights was reported in 4-star hotels, with 46.5 per cent of the total. e average length of stay in collective accommodation es- tablishments went down to 5.1 nights in the third quarter of 2022, from the average of 5.2 nights registered during the same quarter of 2021. e net use of bed-places stood at 72.4 per cent, up by 17.6 percentage points when compared to the corresponding quarter of the previous year. On a national level, during September 2022, there were 258 active collective accom- modation establishments with a net capacity of 19,119 bed- rooms and 44,100 bed-places. On a regional level, total guests in Malta numbered 544,356 while number of nights spent stood at 2,826,407. Total guests and nights in Gozo and Comino decreased to 29,711 and increased to 104,486 re- spectively from 31,414 and 99,919 registered in 2021. When compared with the same quarter of the previous year, in Malta, the average length of stay went down by 0.1 of a night to 5.2 nights. In Gozo and Comino the av- erage length of stay increased by 0.3 of a night to 3.5 nights. e net occupancy rate in Mal- ta increased by 18.7 percentage points, reaching 73.2 per cent, and that in Gozo and Comino decreased by 3.4 percentage points to 56.9 per cent. Total guests for the first three quarters of 2022 amounted to 1,343,581, an increase of 699,171 over the same period in 2021. Total nights spent increased by 3,164,823 reaching 6,236,000 nights. e net use of bed-plac- es went up by 24.1 percentage points to 54.4 per cent. MAJOR corporate tax reforms and a continuous push for compliance will be an inevitable reality for the Maltese economy and businesses in the years ahead as international institutions seek new avenues for debt reduction, to fight climate change and achieve sustaina- ble and equitable growth. is reality emerged strongly in the positions ex- pressed by professionals, politicians, business leaders and other stakeholders at the Tax Conference organised by the Malta Institute of Accountants (MIA) on 10th November 2022. Setting the context to the Conference, aimed at Deciphering the Tax Puzzle, MIA President David Delicata said that in the current international scenario, wide-ranging reforms in tax are a given to make the international corporate tax framework fairer and fit for today's eco- nomic realities. "International institutions, whether it's the OECD or the EU, seek tax reform as a matter of not only improving revenue but also to bring stability and predicta- bility in the global corporate tax frame- work". MIA CEO Maria Cauchi Delia high- lighted how the EU was pushing for more transparency, consolidation and coordination on fiscal and economic policies, leading to several proposals in the fields concerning the profession, in- cluding AML and taxation. e MIA has been very active in providing feedback to the relevant institutions and at the ap- propriate fora, in Malta and abroad. "ese are challenging times, but the accountancy profession plays an impor- tant role in this change", she argued. Finance and Employment Minister Clyde Caruana explained that although the EU-level momentum for corporate tax reform has stalled, there is an air of inevitability that this will eventually hap- pen. "Even though we may have gained some time, Malta's tax regime will even- tually have to change because of pressure from different angles," he said. "However, any reforms will have to be accompanied with increased level of compliance. If the latter does not hap- pen, it may have repercussions on the country's financial position." Caruana also called on professionals to play a part in bringing about a change to- wards this culture of compliance. Shadow Finance Minister Jerome Caruana Cilia shared his views on the proposed changes but called on authori- ties to ensure that Malta makes its voice heard in European and other interna- tional fora to advocate a more managea- ble rate of change, which would give tax administrators and practitioners time to adapt to the necessary changes. Commissioner for Revenue Joseph Caruana detailed plans of his Office to focus its efforts on the taxpayers. While recognising challenges associ- ated with the legacy system, Caruana expressed his commitment to support business operators by providing a more effective service. He referred to the setting up of a work- ing group, with the participation of the MIA, to identify simplification initiatives and to maximise the use of digitalisation in the future. is will include both quick wins and longer-term legislative reform to make processes simpler and reduce compliance costs for businesses. e conference also featured the virtu- al participation of Accountancy Europe's Paul Gisby and Johann Barros who shed light on the drive coming from EU insti- tutions to reform tax legislation. Discussion and breakout panels, with the participation of several industry leaders and professionals, addressed rel- evant topics including succession plan- ning in family businesses, selected prac- tical challenges of transfer pricing, AML considerations for tax practitioners, as well as VAT developments in the finan- cial services industry. 4-star hotels hosted largest share of Q3 guest nights Corporate tax reforms and need for compliance will top economic and business agenda in years ahead

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