Alex Borg pledges 15% tax rate for micro businesses

A Nationalist government will lower the tax rate for micro enterprises to 15% and for small and medium enterprises to 25%, Alex Borg said on Friday.

The PN leader said these companies form the backbone of Malta’s economy and a new Nationalist government will give them a fresh start.

Micro enterprises are companies that employ less than 10 workers and have an annual turnover of less than €2 million, while small and medium companies employ fewer than 250 people and have a turnover less than €50 million. The current corporate tax rate stands at 35%. SMEs employ some 250,000 people.

The proposals form part of a package of incentives unveiled this morning by the PN, targeting SMEs and voluntary organisations.

Borg said the VAT exempt threshold will be doubled from €35,000 to €70,000, a move he said will cut bureaucracy and expenses for around 4,000 businesses.

Another proposal is a full refund of training expenses that employers incur when sending their employees on training or re-skilling programmes. “Today, employers only get a partial refund on these expenses but we believe in having a resilient workforce that is constantly improving its skills and this is why we will refund fully any training expenses,” Borg said.

A PN government will also set up 100 industrial units for rent by small enterprises that do have the necessary means to buy their own premises.

Borg reiterated the proposals announced on Thursday targeted towards NGOs, including a refund of VAT incurred on expenses and a 30% tax credit up to €50,000 per year for those who donate money to any registered NGO. Furthermore, a PN government will enable NGOs operating from government-rented properties to buy the place.

“This will give NGOs the breathing space to continue working for the benefit of society,” Borg said.

The conference was also addressed by PN finance spokesperson Adrian Delia and candidate David Pace Ross.

Delia said the corporate tax reductions will come at a net cost of between €55 million and €95 million and the tax reductions will apply to Maltese businesses and not multinational companies.

“This is not tweaking but strong incentives to give our businesses a fresh start,” Delia insisted. He added that the increase in the VAT-exempt threshold will save businesses up to €3,000 per year in bureaucratic costs.

Inheritance proposals address injustice

Alex Borg defended the PN’s proposal to remove all inheritance taxes irrespective of whether the beneficiaries were ordinary families or developers with vast property portfolios.

Responding to a MaltaToday question, Borg insisted taxes on inheritance were “an injustice” since taxes would have already been paid when that property was bought. “It does not make sense for children who inherit their parents to pay taxes once again on property. This is an injustice we will redress for all sections of society,” he said.

When asked to respond to the finance minister’s criticism of the PN’s personal tax proposal, Borg said Clyde Caruana was no position to speak on government expenses. “Only this week, Clyde Caruana approved a direct order for €4 million to ARUP, the company entrusted with the government’s mass transport project. Weren’t the studies already done?”

Borg said Caruana had also approved a direct order to the tune of €120 million for the expansion of Mater Dei Hospital’s emergency department after the initial tender for €80 million was cancelled.

“The Labour Party has been all about spending but it has not said how it will invest to attract new economic niches to generate wealth,” Borg rebutted.