[WATCH] Chamber study proposes lowering VAT to 7% on travel and hospitality

Travel and hospitality services should be charged VAT at 7% and the wage subsidy retained until a COVID-19 vaccine is found, an industry think tank has proposed.

The measures form part of a wide-ranging document drawn up by a think tank set up by the Chamber of Commerce to map out an economic strategy in the wake of the COVID-19 pandemic.

Other proposals include the regeneration of depleted areas in towns and villages, incentives for digital smart manufacturing and the creation of a rapid mass transit system.

The document unveiled on Tuesday also harps on the need for Malta’s reputation to be tackled swiftly and decisively if the financial sector is to improve.

The study targeted 11 themes – a clear economic vision, better regulation and enforcement, governance, digitalisation, government assistance, human resources development, sustainability, reforms in education, infrastructure, communication and data. 

Chamber President David Xuereb said the country and its economy constantly need rethinking, in order to sustain their resilience. 

“This is a forward-thinking study which doesn’t shy away from the circumstances brought about by COVID-19, but rather embraces them,” he said. 

He also stressed a clear economic vision can be achieved by having clean governance, leading to the sustainable support of businesses.

The financial services round table said Malta’s success in the Moneyval test will be an essential step towards a successful future.

The financial services team also stressed on the need to improve the government’s e-Gov services and continued support towards innovation. 

“We need to create a platform for funding opportunities which are directed towards start-ups, as well as improve in our efforts towards incentivising foreign expertise,” the round table recommended. 

An expert group on the construction sector said a strategic national vision was necessary to harmonise laws and provide better regulation.

The think tank, set up by the Malta Chamber looked to study and propose a way forward for the economy in the wake of the COVID-19 pandemic

Looking ahead, the chamber president said the think tank had a foresight of 24 months.

“We are putting the national interest first, while not being armchair critics and working proactively,” Xuereb said. 

Addressing those present minister Carmelo Abela commended the chamber for its initiative, stressing on sustainability and continual improvement. 

“We should be working together so the country can move forward, the government needs to shoulder responsibility and is not taking anything for granted. We need to embrace change,” he said. 

Labour MEP Miriam Dalli said that while COVID-19 was a shock to the economy and social fabric of the community, one must look at it as a catalyst for change which was long overdue. 

President George Vella showed his appreciation in the direct manner in which information was gathered. 

“What we have known thus far, no longer applies, we are seeing deep rooting change taking place thanks to the pandemic. We need to see what we have done wrong, and change,” he told those in attendance.