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News & Knowledge

Malta: Measures to support businesses and individuals during COVID-19

6th April 2020

The Maltese Government has launched a set of measures to assist businesses in Malta in the light of the COVID19 pandemic and its possible effects on the Maltese economy. The measures which are being implemented include both liquidity measures as well as direct fiscal aid. MSI's Maltese accounting member Premium Audit summarises the key measures.

The liquidity measures which have been made available to Maltese entities amount to € 1.6 billion, include €700 million which relate to tax deferrals and € 900 million by way of loan guarantees, amongst other measures.

A direct injection of € 210 million which represents 1.5% of the Gross Domestic Product of Malta will also be aimed at strengthening the economy and improve the public health sector spending.

The following summary identifies the various fiscal measures which have been gradually implemented:

Wage supplements: This scheme is aimed at providing employees with a basic wage to counter the economic disruption as a result of the COVID-19 pandemic. The employees of entities operating within business sectors which have suffered a significant loss of business activity or whose business activity has been suspended as part of the social distancing measures being adopted by the country, are eligible to receive assistance in the form of wage supplements. The measure provides for a basic monthly wage of €800 and is applicable to both self-employed and full-time employees.

Employees of business sectors operating within sectors which have been adversely affected, but to a lesser extent than the primary target sectors, are eligible to receive a one days’ salary per week equivalent to €160 per month.  Part time employees within this sector are also eligible to receive wage assistance amounting to €100 per month.

Persons employed in Gozo, which is the sister island of Malta, are eligible to receive two days’ salary per month, equivalent to €320 (per month) for full time employees and €200 per month for part-time employees.

This assistance covers a person’s main source of income and any individuals in receipt of a Government, retirement or services pension as well as students in receipt of a stipend are not eligible for such assistance.

Deferral of payment of taxes: A two-month deferral of payment scheme in respect of Value Added Tax, provisional tax and national insurance contributions on salaries which fall due in March and April 2020 has been introduced.  These deferrals are estimated to improve liquidity by €700 million.  This scheme is applicable to businesses which have experienced a significant downturn in turnover.   The eligible taxes shall be settled in four equal monthly instalments in the four-month period between May and August 2020.  VAT dues shall be settled in two equal instalments within the two quarterly returns immediately following the quarter whose dues would been deferred.

Covid19 Guarantee Scheme: This scheme has been launched by the Malta Development Bank and provides guarantees to commercial banks in order to provide access to bank financing for the working capital requirements of business in Malta. This scheme has been approved by the European Commission under the Temporary Framework for State aid measures to support the economy in view of the COVID-19 pandemic. €350 million have been allocated by the Government for the purpose of guaranteeing loans.  This will enable commercial banks to leverage the guarantees resulting in €777.8 million as an aid to Maltese businesses.

Quarantine Leave: A grant of € 350 payable by way of a one-off lump sum has been introduced and is payable to employers who have or had a member of their staff on mandatory quarantine leave. This measure is applicable to all full-time employees.

Teleworking assistance measures: Maltese enterprises have invested in IT resources in order to enable tele-working as a preventive measure to implement social distancing guidelines.  The Maltese Government has thus implemented financial assistance measures which covers € 500 per teleworking agreement.  The grant is awarded against 45% of the eligible cost and is capped at €4,000 per business undertaking.

Employment to third country measures: The Maltese Government has identified that no new applications made by third country nationals for work permits will be processed with immediate effect, until further notice.   This limitation is not applicable to highly qualified persons. Furthermore, the competent authority will assist third country nationals living in Malta to find an alternative job, where necessary.

Additional Social Measures:

Assistance to parents

As a result of the preventive measures being implemented in Malta, all schools and educational institutions have been closed. This measure is thus aimed at assisting parents who both work in the private sector.  A weekly payment of € 166.15 for full time employees and €103.85 for part-time workers is being paid to one of the parents who is required to look after school-aged children.  This scheme is applicable in the case where the parent cannot work through teleworking arrangements.

Assistance to unemployed persons

Employees who have been made redundant as of 9 March 2020 as a result of COVID-19 pandemic will be eligible to a Contributory Unemployment Benefit of € 166.15 per week for persons who were in employment on a full-time basis and €103.85 per week for persons who were employed on a part-time basis.

Persons with disability

Persons with special needs who are in employment within the private sector, may opt to implement strict social-distancing measures and thus not attend to their work-duties at their place of work. Financial assistance amounting to €166.15 per week will be paid to full-time employees and €103.85 will be paid to part-time employees adopting such measures.

Rental subsidies

The Maltese Government will be also raising the subsidies for rental payments for individuals who are no longer in employment as a result of the COVID-19 pandemic

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Premium Audit was established in 2009 and provides accounting, tax compliance, audit and payroll services.

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