Issue link: https://maltatoday.uberflip.com/i/946236
maltatoday SUNDAY 25 FEBRUARY 2018 News FOR the first time ever, credit rating agency Moody's has raised Malta's rating to A3 positive, from A3 sta- ble, following an audit released last August. Another agency, DBRS also an- nounced it has raised its rating for Malta from A to A High. DBRS's rating increase is the first since Oc- tober 2013 while Moody's rating is the highest it has ever been. In a statement, the Government pointed out that Moody's rating had previously been decreased between 2008 and 2013. It said that the rat- ing upgrade by DBRS was a result of the great improvements in public finances registered since 2013. Since DBRS's latest review, Mal- ta's Government debt had been materially revised downwards due to more favourable growth and the recent budget surplus. Debt-to-GDP ratio is now fore- cast to decrease to 41.2% of GDP by 2022. "Malta nonetheless faces some challenges," DBRS said, pointing to the liabilities carried by Maltese state-owned enterprises. "Malta's small and open economy with some sectors highly dependent on foreign demand, such as tourism, exposes the country to external de- velopments. Pressures from rising age-related costs, if unaddressed, could pose a concern for the pension and healthcare system." DBRS said recent economic per- formance had been remarkable, with 6.4% average GDP growth during 2013-2017 trebling the 2.1% average rate in 2004-2012. "While remote gaming was a determining factor, other sectors such as tourism which is a major source of income and employment in Malta, and financial and busi- ness services also contributed to the outperformance… Increasing labour force participation and ad- dressing emerging infrastructure bottlenecks are expected to help Malta's GDP per capita at €22,724, to continue to converge to EU average levels of €29,148…" DBRS also warned that corporate tax reforms at the EU level and in the US, could diminish to some de- gree the attractiveness of Malta for multinational companies. It said changes to international taxation could impact Malta dispropor- tionally, given its higher reliance on corporate taxation (close to 17% of total revenues). "Broadening the tax base and reducing tax evasion could mitigate this risk." "Also, the gaming industry in Malta could be impacted by regu- latory changes at the EU level. On the domestic side, higher wage in- creases could put upside pressure on GDP growth, while delays in construction projects or increas- ing physical bottlenecks could constrain growth." DBRS said Malta's citizenship scheme had guarantee higher- than-expected revenues that will contribute to a general govern- ment surplus of 0.5% of GDP. However age-related costs are expected to increase rapidly, re- quiring "additional measures" to keep the healthcare and pension system sustainable. DBRS added strong demand for housing influenced by rising in- comes and migration was fuelling rising prices. "A continuation of this trend could lead to significant imbalances." International tax revenues from multinationals comprise 17% of Malta's total revenues, DBRS said Tax reforms will hit Malta 'disproportionately' Moody's, DBRS upgrade Malta credit ratings TIA RELJIC AUTHORITIES are finding it hard to clamp down on illegal commercial waste tipping, as perpetrators find it much eas- ier – and cheaper – to pay the fines imposed by the Planning Authority than disposing of the waste legally. Video footage obtained by MaltaToday shows commercial waste being dumped in an area known as Ix-Xaghri l-Imqalleb, in Mqabba. The tipping re- sumed on 16 February despite two active enforcement notices in place. Since then, the quarry was filled and overtopped, and now the tip- ping is being done in order to in- crease the circumference of the hill. The footprint of the quarry is being exceeded as a result. Both enforcement notices are subject to separate daily penal- ties of €50, which accrue to a maximum amount of €50,000 for each notice. This creates a situation in which perpetrators opt to pay the fee and continue tipping, as it would prove viable from a business perspective for them to do so. Ironically, there are currently multiple planning ap- plications on the site proposing the installation of a photovol- taic farm. Illegal tipping of industrial waste resumes