The Malta Chamber is proposing a cap on the percentage of non-EU workers each business can employ, tax exemptions to entice Maltese abroad to return home and parking fees to help end traffic congestion.

These are among the 36 'priority' proposals outlined by the Malta Chamber in a document ahead of the 2025 budget. 

The chamber said a strategic workforce was needed to address shortages and ensure a balance between staffing and the country's capacity to accommodate workers.

Its suggestion to cap the percentage of non-EU workers, known as third-country nationals, comes amid concerns of overpopulation. The chamber said such capping should not apply to businesses providing essential services or where it is otherwise crucial.

Identifying 12 main priority areas, the chamber called for a new economic model for Malta that favours a high value-added economy over the current model, which it says is based on population growth at lower productivity levels.

At a news conference, Chris Vassallo Cesareo, president of the Malta Chamber said the time for action is now. 

"Last year we presented 219 proposals.  Only four were implemented.  The rest remain valid," he said. 

"Now we are making further proposals. Without further delay even if difficult or unpopular, the government has to take measures to address the pressing issues."

Fielding questions from Times of Malta, chamber CEO Marthese Portelli said she could not comment on the prime minister’s promise of the "biggest tax cuts in history" in the upcoming budget.

“It would be quite immature to say what our position is because we do not have the details yet, but we can definitely say that any reduced tax rates need to be seen in context.”

She said chamber's proposal last year for COLA not to be taxed had been met with a negative response “because of financial issues.”

The document presented by the chamber says that the transformation of Malta's economic model requires a multi-year investment plan on energy coupled with the gradual removal of subsidies, and measures to promote environmentally sustainable modes of transport including the introduction of parking fees.

It said the 12 priorities should be:

• Competition
• Fiscal Discipline
• Utilities
• Renewables
• Traffic Congestion
• Sustainable Tourism
• Planning and Upkeep of Public Areas
• Value-Added Employment
• Third Country Nationals 
• Low-income Earners and Pensioners
• Public Procurement
• Proper Enforcement of Laws and Regulations

Review planning, clean up Malta

On planning, the Malta Chamber advocated for a review of the Strategic Plan for the Environment and Development (SPED), last carried out in 2015.

It said public areas should be regularly cleaned and maintained and there should be a centrally managed permitting system. 

On tourism, it calls for a moratorium on applications for tourism accommodation and a "clear plan" for tables and chairs, which many have complained have overtaken public space. 

A percentage of the VAT generated by each locality should be invested back into the area, it said. 

Parking fees and traffic congestion

It repeated its proposal to introduce parking fees in central urban areas, but said these should be payable to an e-mobility wallet, which would be used to fund sustainable transport options.

With the e-mobility wallet, the government would allocate an annual amount to each wallet to be used for various environmentally sustainable or shared transportation options.

It calls for improvements in public transport access to and from industrial estates, ensuring coverage of all key routes, all shifts, and better access to factory locations, particularly at night.

Additionally, it suggests linking car license fees to usage and restricting certain activities that cause congestion during peak hours, with incentives for night shifts and the pooling of delivery fleets.

Tax changes and reduction of subsidies

While urging the incorporation of planned tax refunds by cheque into revised tax bands, the Malta Chamber also calls for improvements in tax collection, a reduction in public spending, and a focus on value-added expenditure.

It says the incorporation of planned tax refunds by cheque into the revised tax bands would eliminate the administrative burden of issuing these cheques and improve the monthly take-home pay of employed individuals.

It also advocates for encouragement in the uptake of supplementary pensions and the implementation of an auto-enrolment with an opt-out mechanism for employees."

The Malta Chamber calls for a five-to-10-year energy investment plan, to be developed in consultation with the private sector, with clear milestones and deliverables based on realistic growth projections and the available skills.

“The plan must ensure that the investment in the distribution network is not only adequate for immediate needs but also serves us well for the next three decades.”

It should also support broader renewable energy generation and distribution, while addressing the liberalisation of energy distribution.

Alongside a widespread national campaign on climate change, the Malta Chamber advocates for the gradual reduction of subsidies, with a minimum of six months' advance notice, to avoid subsidising excessive consumption and to increase the uptake of renewables.

Maltese abroad and Third Country Nationals

Under the heading 'Value-Added Employment', the chamber called for tax exemptions for highly qualified Maltese people who return to Malta. 

It is also calling for constant monitoring of temping and outsourcing agencies. Temping and outsourcing agencies would not qualify as permanent employers under its proposals.

It proposes that employment licenses for third-country nationals be extendable for an additional three years after the first year of successful employment with the same permanent employer, provided that third-country nationals meet certain educational requirements, possess specialised skills in demand, and have a good record of adhering to laws and integrating into society.

Workplace pensions

It also advocates for encouragement in the uptake of supplementary pensions and the implementation of an auto-enrolment with an opt-out mechanism for employees."

Employers who contribute should be granted more attractive tax incentives than those currently offered."

The Malta Chamber has also called for investment to ensure an adequate electricity supply, a stable distribution network, and adequate water supply and sewage systems that meet demand.

It has put forward proposals to support sustainable renewable energy adoption, including a feed-in tariff for businesses that offers better returns on investment.

Regarding competitiveness, the Malta Chamber states that the country needs to transition towards a more sustainable approach to infrastructural development that considers economic growth, competitiveness, and environmental, and social sustainability.

On tourism, it says that “to remain competitive against other Mediterranean countries, quality should be maintained throughout all elements of the supply chain, not least, our infrastructure.”

Good governance

The Malta Chamber also notes the increasing turnover and changes in high-ranking positions within government ministries, entities, authorities, agencies, and departments.“

This instability does not bode well for the country,” it notes.

It also calls for proactive, coordinated, and impartial enforcement at all levels.

The Malta Chamber argues that, in addition to aiming to improve business efficiency and productivity, the government must invest in necessary reforms to ensure good governance across the board.“

Budget 2025 must seek to tangibly transform the current economic model into one that results in a well-being economy benefiting society at large,” it says.

The underlying principles of good governance play a crucial role in this.

Ethical businesses are being penalised for being good corporate citizens, while unethical operators thrive by evading or circumventing their obligations due to a lack of proper enforcement and good governance.

"Failures in good governance undermine ethical business practices and society at large," it said.