Workers should be taxed 15% on any money they make from overtime pay, the Gozo Business Chamber has said in its Budget 2023 proposals.

The measure, one of ten suggestions to improve the economy on Gozo, would help employers retain full-time workers in the private sector.

Since last year, workers in non-managerial positions with an income less than €20,000 have been taxed 15% on the first €10,000 they make from overtime pay.   Part-time workers had their tax rate reduced from 15% to 10% in the same budget.

The Chamber wants the removal of the €10,000 cap in October's budget and an equal tax rate on full-time and part-time employment. 

'Very difficult' labour market

The Chamber pointed out that while the Gozitan economy has showed signs of recovery since the COVID-19 pandemic, particularly on tourism, it faces a "very difficult" labour market situation.

Companies are finding it difficult to recruit local employees, having to resort to hiring third-country nationals with the recruitment and bureaucratic challenges that entails, it said.

It pointed out that while in Malta 21% of employers are in the public sector, this is a higher rate, at 32% in Gozo. This doesn't include those in the Community Workers Scheme or who work for Gozo Channel or the Public Health Health Care system on the island. 

It said companies faced high labour costs and employee poaching was "on the rise". 

It said Gozo is an island region with specific characteristics and issues that need to be addressed.

There should be a scheme to support professionals who have the main office in Gozo to open an office in Malta in order to expand their clientele. 

Excessive devlopment

On the environment, it said Gozo should be designated as a "design priority area" and that its own regional planning policy should be created. 

It raised concerns about excessive development and the use of areas Outside the Development Zone.

A particular problem is the electricity infrastructure on the island, which "at present cannot support the shift to electric mobility" that is planned.

Other proposals include developing the air link between the two islands, creating a sustainable multistory underground car park in Victoria and to start the process of a new hospital. 

The ten budget proposals from the Gozo Business Chamber

Employment

• Tax all overtime earned at a flat rate of 15%;

• Provide a scheme to support professionals who have their main office in Gozo but would like to open an office in Malta to expand their clientele. 

Environment 

• Designate the whole of Gozo as a design priority area;

• Create and apply a regional and comprehensive planning policy for Gozo. 

Accessibility 

• Ensure that the fast ferry service between Gozo and Malta is retained and that a consistent level of service is provided;

• Develop an air link between Gozo and Malta;

• Ensure that the permanent link between Gozo and Malta remains a key policy priority given the long-term nature of the project. 

Infrastructure

• Initiate the process for a sustainable multi-storey underground car park in Victoria;

• Start the process for a new hospital for Gozo which should complement the investment made in the Queen Mary University of London Gozo campus;

• Finalise important infrastructural projects which are already being developed.