Over 210,000 employees will be receiving income tax refund cheques in the coming days, Finance Minister Edward Scicluna said in parliament on Wednesday.
Opening the debate on the €900 million COVID-19 economic recovery plan, he said this measure was being implemented for the third year running.
Scicluna said these refunds will cost the government €11.5 million, and the overall value over three years was €35 million.
The Finance Minister said the key decision in Malta was to not enter a full lockdown. This was why job creation in Malta was still the highest in the EU, according to Eurostat.
This “economic regeneration plan” the minister said, was aimed to target sectors like retail and tourism which took an unprecedented blow as their operations ground to a halt.
Scicluna recounted how the government’s first priority was to safeguard jobs through the wage supplement scheme at a cost of €68 million up to the end of May.
It then deferred taxes due from businesses between March and June and imposed a moratorium on bank loans to the benefit of 5,000 families and thousands of businesses.
The finance minister also referred to the government guarantee scheme saying that, by the end of May, around €100 million were issued to support businesses struggling to make ends meet.
Despite government being a guarantor of up to 90%, some banks were still asking for a personal guarantee, he said. Efforts were being made to address this through the National Development Bank, Scicluna added.
Scicluna said this plan would equate to around €900 million, of which €200 million would go towards further tax deferrals, €400 million for capital projects on a seven-year period, and €300 million for measures to support families.
These did not include €200 million for sectoral aid on COVID-19 measures, he pointed out.
“We are the start of a new normal,” he said.
“Clients are emerging from the pandemic in shock and this plan aims to encourage operators facing this situation,” the finance minister remarked.
He noted that €72 million were being allocated for wage supplements till the end of September, €30 million to half utility bills for businesses for three months, €50 million for rent subsidises, and €30 million on €100 vouchers to stimulate consumption from restaurants, bars and hotels.
Scicluna also referred to the reduction in stamp duty on the acquisition of property, from 5% to 1.5% saying this came into force on June 9 and will remain in force until March 31 next year. The same timeframe applied to the tax reduction for vendors.
‘We kept unemployment at 50-year low’
Economy Minister Silvio Schembri refuted criticism government had placed the economy before public health, saying Malta had the highest number of COVID-19 tests carried out per capita in Europe.
Malta registered 0.7 per cent economic growth in the first three months, contrary to the rest of Europe, he said.
“Unemployment has been kept at 4% which is still the lowest level in 50 years,”
“This is testament to government’s strategy which did not heed the Opposition’s advice for a total lockdown,” he said.