ASCS Review on Budget 2018

The yearly Budget is once again upon us where measures relating to all the sectors were presented. The first thing that hits the eye is the fact that Malta has achieved better credit rating from both Standard & Poor’s and Fitch Ratings which is always beneficial to our economy. ASCS feels that all the measures presented in the budget speech will definitely be beneficial to Maltese individuals as well as businesses. However, we also feel that some measures were not enough to address present issues.

Transport

With regards to transport; the incentive of a year of free public transport has been extended to 16 – 20-year olds. This is a very good measure; however we feel it is not a good enough of an incentive to deter 18-year olds from getting their own car and reducing traffic congestions. Another measure is a refund on purchase of motors, scooters or motor-assisted bicycles, all of which are also VAT exempted. There are also incentives on purchases of hybrid and electric cars however ASCS feels that these measures are not enough to address the ever-increasing traffic problem. Furthermore, there seems to be no long-term plan to improve the public transport system on the islands.

Competition

The first point here worth noting is the introduction of a working group aimed at planning a strategy on how Malta can benefit from Brexit. ASCS feels like this is very proactive thinking as Brexit creates opportunities which Malta can benefit from. The Citizenship Program has been extended as well. This year a system of offset of payments between companies and the government was also introduced which improves cashflow and we feel this is a very good measure to better help businesses manage their cash flows. Finally, another measure relates to gaming where VAT grouping was introduced for the gaming industry. This is to have more sustainable growth in this industry which is very important for the Maltese Economy.

Education

Firstly, SEC and MATSEC examination fees due by students are to be reduced by half with the Government bearing half the costs. This is beneficial as it lessens the burden on families of the students sitting for these exams. Another very advantageous measure for students is the exemption from income tax for students pursuing post-graduate courses (1 year for masters student and 2 years for Ph.D. students). This is however applicable for students starting their course in 2017/2018 and excludes courses forming part of the curriculum to get a professional warrant. Whilst congratulating this measure to encourage further education ASCS is disappointed on the fact that Master in Accountancy students won’t benefit from this.

Gozo

With regards to Gozo a refund of 30% (up to €6,000) on average wage was presented. This will be given to employers on each employee employed in the Gozitan private sector when a 3+-year contract is offered. We feel this is a good measure to try and increase jobs in Gozo. Furthermore, there was an initiative to start an ICT research hub project which would encourage more sustainable jobs in Gozo as well as to make use of idle space. We do feel however that not enough importance was given on facilitating transport between Malta and Gozo. Furthermore, there was nothing in the budget addressing the struggle of Gozitan students in finding accommodation in Malta.

Reforms

It is also worth noting that there are consultations on reforms to be implemented on:Use of cannabis for medical purposesParliamentary reformHuman trafficking debatePossibility of extending the vote for general elections and European Parliamentary elections to 16-year olds

Other Measures

Some other measures include a Cost of Living Adjustment (COLA) increase of €1.75 and an extra day of leave for employees.