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9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 26.10.2023 C lyde Caruana will present the sec- ond budget of this legislature on Monday in politically unfavourable circumstances. Whatever he says will be overshadowed by the Appeals Court decision to confirm the annulment of the Steward hospitals deal. The damning ruling has cast a long shadow on the government over the be- haviour of senior public officials involved in the deal. The court went as far as ascribing col- lusion to government officials and ques- tioned why they chose to defend the in- terests of the concessionaires instead of the State. But possibly more significant from a political aspect is the pending magiste- rial inquiry into the hospitals deal, which is now very likely to be concluded. The implications of the magisterial inquiry are of a criminal nature and could point an accusing finger at former senior gov- ernment officials involved in the deal. The Court of Appeal's decision to annul the contract is significant and has ram- ifications on the governance structures of this country. Good governance is one aspect that prospective investors look at when deciding where to put their money. After the saga that Malta went through to get out of the Financial Action Task Force's greylist, the government must clearly show it means business in en- suring the machinations behind the hospitals deal do not happen again and all those who may have done wrong are brought to justice. Within this context Caruana has a duty on Monday to not only present the gov- ernment's financial programme for next year but also put prospective investors' minds at rest that the government is a serious partner that cherishes good gov- ernance and transparency. This is all the more important in the face of a bleak international outlook that requires a nimble and creative govern- ment to be able to attract and retain in- vestment. Caruana should lay out the timeframes for the anticipated changes to the cor- porate tax regime that will see the intro- duction of an effective minimum 15% tax rate for companies with a global turnover of €750 million. It has been reported by sister newspa- per MaltaToday that Malta has informed the European Commission of its inten- tion to delay the introduction of the top up rate by six years. The reason given was that the tax authorities need more time to prepare for the eventuality. Even if Caruana confirms the delay on Monday, he should still lay down a clear timeframe of how the change will hap- pen. Businesses need clarity and stability. Although the minimum tax rate im- pacts large companies, Malta should move towards a corporate tax regime that is distinct from personal income tax and which treats all businesses in the same way irrespective if they have foreign shareholders or are completely home grown. Any incentives in the form of tax cred- its; any change in tax rates to lower the burden, must apply across the board thus giving domestic businesses a breather. But the Finance Minister must also ensure that people's purchasing power is strengthened. With the cost of living adjustment hitting a new record, people in certain wage brackets could end up be taxed at a higher rate. It is thus im- perative, at the very least, that Caruana announces adjustments in the personal tax brackets to ensure that the COLA in- crease does not end up penalising work- ers who will be charged at a higher tax rate. Furthermore, the Finance Minister must also consider wider tax brackets and possibly the inclusion of another rate to give the middle class a permanent tax cut. This will help mitigate the impact of in- flation on people's pockets. Monday's budget must keep in mind ex- isting realities but it must also provide a blue print for a new economic direction that targets high value added sectors. A budget for a new direction n August 2023, the seasonally adjusted volume of retail trade decreased by 1.2% in the euro area and by 0.9% in the EU, compared with July 2023, according to estimates from Eurostat, the statistical office of the European Union. In July 2023, the retail trade volume decreased by 0.1% both in the euro area and in the EU. In August 2023 compared with August 2022, the calendar adjusted retail sales index decreased by 2.1% in the euro area and by 2.0% in the EU. In the euro area in August 2023, compared with July 2023, the volume of retail trade decreased by 3.0% for automotive fuels, by 1.2% for food, drinks and tobacco and by 0.9% for non-food products. In the EU, the volume of retail trade decreased by 2.4% for automotive fuels, by 0.9% for food, drinks and tobacco and by 0.6% for non-food products. Retail Price Volume DID U KNOW?

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