Economic Regeneration Plan
Preparing you for the new normal
Our experts' analysis following the presentation of the Economic Regeneration Plan by the Government of Malta on 8 June 2020.
Deloitte Let's Talk: Economic regeneration plan
Good evening everyone and welcome to another episode of Deloitte Let’s Talk. This evening we shall be talking through the measures announced by the Government of Malta in its Economic Regeneration Plan. The value of the Economic Regeneration Plan is a staggering 6.8% of GDP, and will be rolled out through a combination of tax cuts and spending boosts.
The first set of measures relate to property. In order to support the real estate market, stamp duty rates on acquisitions of real estate will be levied at the reduced rate of 1.5% on the first 400,00 euro. This would apply for all purchases that are currently covered by a promise of sale agreement, and will be retained until March 2021. Property transfer taxes levied on the seller, are to be reduced from 8% to 5%. In addition, adjustments to the first-time buyers scheme are also expected.
Another measure applicable to the real estate industry, is a 4 million euro fund that has been allocated to the construction industry with the aim of modernising equipment. The assistance will be capped at 200,000 euro per application.
Moving on from the real estate sector, the COVID Wage Supplement shall continue to be paid through to the end of September. The Supplement shall remain at 800 euro with respect to those sectors that were most adversely hit by the pandemic. Employees in other sectors shall see the subsidy dropping to 600 euro starting July. Businesses listed in Annexes A and B of the COVID Wage Supplement scheme shall also be eligible for rental subsidies, capped at a maximum of 2500 euro for July, August and September.
The next group of measures seek to encourage consumer spending. The Government announced that it shall be issuing 100 euro worth of vouchers to all resident persons above the age of 16; 80 euro of these are reserved for use at hotels, restaurants and bars, whereas the other 20 euro are intended for use in shops and similar outlets that were forced to close due to the pandemic.
Furthermore, around 210,000 workers stand to benefit from a further tax refund by the Government. The total sum to be disbursed by the Government stands at 11.5 million euro.
With respect to In-Work Benefits, the eligibility criteria shall be widened and child benefits are to increase to 250 euro per child.
Next we’ll address measures that seek to ease the burden of costs. Petrol and diesel prices shall drop by 7 cents, starting Monday 15 June and electricity tariffs for businesses affected by the impact of COVID-19 will be cut by 50% from July up until September.
Couples forced to postpone their wedding plans shall benefit from up to 2,000 euro compensation for expenses incurred.
Finally some targeted measures to support local businesses include a conversion of tax credits that will see many local businesses benefitting from a cash refund of tax credits that they are unlikely to claim in the current year.
In order to assist in the re-engineering of business models, 2.5 million euro shall be granted to businesses to help adapt their business models.
Moreover, a 5 million euro budget is being afforded to those businesses that want to advertise Maltese products both locally and abroad and a 10 million euro grant on exports shall be given to companies at risk for not being paid for goods which they had exported.
We thank you for tuning into another episode of Deloitte: Let’s Talk. Until next time.
The impact of COVID-19 is expected to result in a significant contraction in GDP during 2020. On 8 June 2020, the Government of Malta announced an Economic regeneration plan to assist families and businesses that have been adversely affected. The stimulus package is to be rolled out through a variety of tax cuts and spending measures.
08 July 2020: Updates on the measures announced in the Economic Regeneration Plan
Following the Government of Malta’s announcement of the Economic Regeneration Plan on 8 June 2020, a number of updates in relation to the measures adopted to assist families and businesses that have been adversely affected by the COVID-19 pandemic have been published. Learn more...