Chamber of Commerce says budget acknowledges private sector’s role in economy

In its reaction to the 2017 budget, the Malta Chamber of Commerce, Enterprise and Industry noted that it continued to build on previous years’ efforts in a number of areas including income support for low and middle-income earners and pensioners, further investment in human resources, environmental initiatives and transport infrastructure.

The Chamber also noted that, save for certain excise tax measures, the budget speech had spared major surprises and shocks on private economic operators.

It said it was encouraged by the remarkable rate of economic expansion over the past quarters and the manner in which this is supporting public finance consolidation.

The 0.7% deficit to GDP ratio for 2016 and 0.5% ratio for 2017 was encouraging, but as credit rating agencies had consistently remarked, the country must not allow for any complacency and must at all costs ensure that there are no slippages in at least three areas: public finances, continued reformed programmes and partnerships with the private sector.

The Chamber welcomed efforts being made in the area of competitiveness, particularly the access to finance via the seed-capital for setting up of the Development Bank, tax incentives on dividends from companies listed on the Malta Stock Exchange and tax deductions for employers offering transport to their workers.

Tax incentives on transfer of family businesses, the attraction of an international accelerator for local start-up companies, a proposal to support companies to facilitate the research and commercialisation of innovative products and services, the introduction of permitting (planning) fees applicable to industry, and the simplification of licencing and start-up procedures for business were also welcomed by the Chamber.

The Chamber said that €1.75 cost of living increase was not unaffordable for employers but renewed its call for adjustments to the COLA mechanism in terms of the formula used and an updating of the Retail Price Index through a revised Household Budgetary Survey.

It said it was also disappointed to note that that there were no measures to address the further lowering of energy tariffs for business, which was the Chamber’s prime recommendation prior to this year’s Budget.

“It is feared that this fact may support further erosion in Malta’s competitive position in cost-sensitive sectors relative to other regions and states.”