Gozo business lobby: Remove overtime flat tax capping to stave off public sector competition

All overtime earned should be taxed at a flat 15% rate, the Gozo Business Chamber is suggesting in its budgetary proposals.

The flat tax rate on overtime was introduced for the first time in the last budget but it came with a capping of €10,000. The GBC is now proposing the removal of the cap.

The organisation argues the move will be especially beneficial for Gozitan companies in their bid to retain full-time workers as they face stiff competition from a bloated public sector.

Statistics accompanying the document show that in 2020, while employment with the public sector in Malta accounted for 21% of all full-time jobs, in Gozo this stood at 32%. These figures do not factor in employees in the Community Workers Scheme.

The GBC said that as at April 2022, the number of employees with the Community Workers Scheme in Gozo stood at 502, whereas the number of community workers on Malta stood at 651.

“Companies in all sectors are finding it difficult to recruit local employees, most often having to resort to third country nationals with all the difficulties this entails in terms of recruitment and the bureaucratic process that needs to be followed,” the GBC said, emphasising the fact that the public sector is in competition with the private sector for employees.

This situation is leading to a slower recovery rate because despite the increased demand in some sectors, companies are not in a position to step up, the chamber warned. 

Another proposal floated by the GBC is for the introduction of a scheme to help Gozitan self-employed with a main office in Gozo to open an additional office in Malta.

The chamber reiterated its support for an air link between Malta and Gozo, and is insisting that the permanent link between the islands remains a key policy priority.

But the GBC is also concerned with overdevelopment in Gozo and the current electricity infrastructure, which it says cannot support the shift to electric mobility.

The GBC proposed that all of Gozo be designated a design priority area and called for the creation of a regional and comprehensive planning policy for the island.

Other proposals include the building of a multi-storey car park in Victoria to ease congestion in the city and the construction of a new hospital to serve the community and complement the Queen Mary University of London campus.