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Matthew Vella
Women can get Lm700 in tax credits for returning to the world of employment after an absence of five years, but the door from which they will re-enter could be a tight one.
According to the Tax Credit (Women Returning to Employment) Rules, a budget measure devised by Prime Minister and Finance Minister Lawrence Gonzi to increase female participation in the labour market, strict limitations impede the free access to gainful employment for women.
The Lm700 tax credit will not be available for women whose employers are family relatives or a company in which she or her relatives are shareholders, either directly or indirectly.
The government is claiming the rules have been structured in a bid to curb any form of abuse on taxation.
Women in fact cannot claim their tax credit if their employers are their parents, their spouses or parents-in-law, children or adoptive children and their spouses, their siblings and their spouses, or where the employer is a company in which the woman or any of the ‘barred’ employers are directly or indirectly a shareholder.
It means that women cannot work in any family business in which their immediate relatives or her relations-in-law are the employers.
According to Director of Information Emanuel Abela, who answered on behalf of Ministers Dolores Cristina and Louis Galea, respectively in charge of social policy and employment, as well as on behalf of the Prime Minister, the restriction is intended to avoid “possible abuse of the credit.”
“Without this restriction an employer could easily give a salary to his spouse or son or daughter or other relative without the latter actually doing the work and then benefiting from the tax credit. This would have defeated the whole purpose of this measure and would have given a ‘tax holiday’ to the employer on part of his income.”
Abela also said the intention of barring women from claiming tax credits for employment in which they might have shareholding interests is not intended to exclude women having shares in public companies.
“Shareholding and management-ownership are two different arrangements. Shareholder cases fall outside the restrictions. Such women returners shall still benefit from the tax credit. The intention of the restriction is to exclude cases of owner-management, not to exclude someone who is a minor shareholder in a public company and who is not involved in operational management.
The National Action Plan on Poverty and Social Exclusion, undertaken by the Ministry for the Family and Social Solidarity aims to see the female employment rate increase to 45 per cent by 2010 – that is a jump of twelve percentage points within the given years.
According to the plan, ‘inactive’ women are at higher risk of poverty than ‘inactive’ men. More worrying is the fact that 51 per cent of women surveyed by the Employment and Training Corporation are not willing to work outside the home.
And the gender difference is even greater for single parents: only eight per cent of single mothers hold full-time employment in contrast to 36 per cent of single fathers.
So far, there is no indication of how many women can be expected to make use of the tax credit incentives. Abela told MaltaToday it is difficult to predict “because there are multiple factors that shape one’s willingness to re-enter employment.”
matthew@newsworksltd.com
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