The government has been urged by the Chamber of SMEs to keep a 2022 electoral promise and lower corporate tax to 25% for local companies in the upcoming budget.
The proposal is part of a package of 18 recommendations suggested by the chamber to support business and encourage investment and innovation.
It said that lowing corporate tax from 35% to 25% would help incentivise compliance and stimulate economic growth.
The Labour Party had pledged to lower corporate tax during its last general election campaign and the opposition had made a similar proposal.
"Despite being in the electoral manifesto and obtaining cross party agreement, so far we have not seen its implementation, despite its numerous benefits for local businesses and the economy at large," the chamber said.
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Prime Minister Robert Abela recently raised expectations of a planned tax cut of 'historic' proportions that would target the middle class but did not give any further details.
The chamber also called for an extension of the tax bracket for the self employed, of which account for around 35,000 workers in Malta.
The current system means that individuals earning €26,831 pay the same NI as those earning much higher incomes, such as €100,000.
The chamber, formerly the GRTU, also repeated its calls for a change to the Cost of Living Adjustment (COLA) mechanism, saying it no longer accurately reflects inflation or the financial pressures workers and employers face.
It suggests that the mechanism could be adapted to offer higher COLA increases for low-income earners, thereby safeguarding their purchasing power.
One of the Chamber’s key proposals is the creation of a COLA fund. Businesses would fund this through a small percentage of their annual revenues, including contributions from foreign-owned companies.
The aim is to distribute the cost burden more evenly across all businesses.
Businesses contributing to the COLA fund would be eligible for a refund, subsidy, grant, or tax credit, equivalent to a set percentage of the COLA costs incurred.
The Malta Chamber of SMEs represents over 7,000 members across 12,000 business outlets.
The Chamber's proposals focus on four main pillars: Incentivising Investment, Supporting Good Business, Self-Employed and Micro-Enterprises, and Anticipating the Future of Work.
For more information on the Malta Chamber of SMEs' proposals.