Author: SME Chamber

Whilst acknowledging that a closer corporate taxation system at European level could support more coherence in terms of dealing with different tax regimes across the EU, GRTU’s understanding on the effects upon small and island economies such as Malta remain of major concern. Harmonisation in this field of policy along various fronts can lead to an understanding of having the possibility of a one-size-fits-all scenario, which across the realities and make-ups of the Member States’ economies within the EU, may be close to impossible unless it provides unfair advantages to the larger and higher-taxed jurisdictions.

There a number of concerns which effect Malta and its SMEs. In the first instance, such measures are assumed to benefit SMEs in bringing taxation regimes closer in perhaps a bid to make it more straight forward for the potentiality of specific SMEs to engage in business across EU Member State borders. Nevertheless one should firstly not assume that this is the only challenge for SMEs to engage in such cross-border business and moreso, it should not be entertained that not moving towards such policy direction is undermining SME interests in Malta in any way.

First of all, GRTU stands by the principle of subsidiarity and therefore where possible policy decisions should always be taken closer to home. This is a principle that also supports the concept of thinking small first, which allows SMEs and their respective representatives to influence the agenda closer to home. This implies the notion of fiscal sovereignty, which in terms of SME interests in Malta maintains that Malta as a Member State remains in control of its fiscal and taxation policy. This allows a micro-economy like ours to apply policy as would make best sense in terms of our national priorities and allows for adaption towards fiscal well-being in proportion to our small size and economy. Small economies need to retain and maximise their potential flexibility which is an advantage often weighed out by other cons of being of such small size and limited in resources. In turn this also allows for healthy tax competition across Member States. Initiatives driving towards a one-size-fits-all fiscal and taxation policy imply that we are also pushing towards no incentivisation of competitiveness in terms of tax regimes. This will allow a status quo and lack of initiative to re-invent taxation regimes for business  attractiveness – something which all SMEs across Europe would benefit from, but most of all which small island economies like Malta can adapt and renovate in, yet would be unable to if we go head-first towards this direction.

Conditionalities and optionalities still remain – and this is understandable in order not to allow rigidity of entrenched systems to be in one way or other undermining business potential and realities in any Member States. Yet, therefore if this road is to be taken, allowing optionality, one would be risking all the undermining factors for SMEs and related business whilst still providing an opt-out in cases of larger and stronger economies for specific cases which would en toto result detrimental to SMEs from smaller states. This optionality also provides a burdensome system for Maltese SMEs which are often smaller in size and setup than their European counterparts.It is also not guaranteed that any eventual sharing mechanisms based on the formulae proposed, would definitely result in fair and equitable results and may therefore favour the revenue towards larger Member States.

The clear argumentations of small economy setups vis-à-vis their larger counterparts and lack of adequate practical one-size-fits-all apparatus which would benefit all on an equal footing, show that before heading forth with such policy direction, one has to rethink the practical impact on all Member States and forms of entrepreneurial settings within each, prior to designing any such form of way forward.

 

 

GRTU welcomes a more concise version of the MQF  Referencing Report which makes it more practical and user-friendly.  There are a number of positive developments yet through a number of issues have also been flagged by GRTU members.

Maintaining the Descriptors for Levels 1-8

There has been widespread acceptance of the Level Descriptors from Levels 1 to 8 and courses have been transposed in terms of learning outcomes using the current level descriptors.

Introduction of Entry Levels A and B beneath Level 1

The introduction of Entry Levels is considered as a natural step for the framework to be more inclusive and provide recognition for more basic learning which would have occurred yet does not reach Level 1.

National Qualifications and Respective Credits (Levels 5 and 7)

Clarifying the different forms of qualifications at these two levels and their respective expected credits makes it clearer for everyone. Nevertheless one has to clarify what, if any, establishes a full level, as well as provide a better understanding of the derivation of how a specific qualification is pegged to a specific number of credits.

There needs to be more elaboration and consultation on this point in general.

Reducing Number of Minimum Contact Hours to 5 per credit

This reduction is envisaged to make it more straight-forward in terms of contact hours against the notional hours of one credit. One has to consider how this is going to courses which are already accredited with the previous minimum of 6.25hrs.

Nomenclature of Qualifications and Awards

This is envisaged to provide a clearer picture of what constitutes a qualification (full level) and an award which perhaps was previously more difficult to comprehend especially for persons who are not very much  acquainted with the MQF.

On the other hand, there is clear need of communicating with the general public, learner, workers and      employers about what these reflect as otherwise there will be misconceptions on the ground. The influence of nomenclatures from other European systems should also be taken into consideration.

Minimum Credits for Accreditation Decreased from 4 credits to 1 credit

This is also a positive initiative which gives value to shorter learning experiences which may be in effect of value to that particular individual and sector, which was previously being unaccounted and not accredited.    Without adequate awareness-raising, this may be intentionally or unintentionally, abused of.

ECTS/ECVET

Some thought needs to be given on how ECVET and ECTS are used in comparison to how these are used in other European countries. It is also necessary to consider what other credit systems (e.g. different number of hours) are mostly used in Malta and promote an understanding of this         nationally to ensure understanding.

Validation of Informal and Non-Formal Learning

Validation of Informal and Non-Formal Learning needs to be implemented in practice.

Quality Assurance

A lot of developments have been undertaken particularly by NCFHE in this field. QA implications have to however be discussed with training providers prior to changes. NCFHE itself has to be more transparent to instil confidence that a level-playing field is entertained, especially between public self-accrediting institutions and small private providers.

General Education

General Education levels are not given specific credits. This may be a positive decision as otherwise the number of hours undertaken during such learning would result in perhaps far greater hours (and thus credits) than that of credits to be reached for a qualification at these levels. Nevertheless one should also consider how other forms of qualifications at these levels can be compared to a full level in terms of credit.

Fees

A specific change that has been implemented during the period covered in this update is that licensing and accreditation is no longer free of charge. Accreditation and licensing fees that have been implemented, even without consultation and proper justification, are not even reflected in the resources at NCFHE and thus the efficient and timely service to operators. It may also cause unfair competition with public or self-accrediting institutions.

For the full version of feedback, for further information or suggestions, kindly contact GRTU on 21232881 or          .

 

 

 

 

 

GRTU has formally drawn the attention of the Information and Data Protection Commissioner’s Office regarding its concern on the basis of possible data protection and unfair competition regarding access to data entrusted to public authorities for specific purposes. It transpires that the private company Malta Public Transport Service Operations Limited (privately owned by Autobuses de Leon S.L. and Felipe Cosmen Menendez Castanedo) is being allowed a form of access to the National Idenitity Card Database and/or the Driving License Database.

This process is undertaken when an individual is applying online for a ‘Tal-Linja’ Card, upon consenting, to these      national databases. This may imply that the website which transpires to be operated by the said private    company has been given authorization to acquire data from these databases— something which other competing and/or non-competing businesses are not privy of.

GRTU has discussed this matter with the Information and Data Protection Commissioner’s Office whereby explanations and elaborations on the set of approvals and reasoning behind this occurrence have been discussed. GRTU has been informed that the go-ahead has been given to Transport Malta which has been the public authority that has requested this, and that the private company in question is only acting on behalf of the said authority. It has also been explained that a set of procedures have been set in place to, as much as possible, ensure that such data is not mishandled or abused of in any way. It has been explained that this particular case has been approved due to its nature and on a case-by-case scenario. This has been described as a necessity to ensure implementation of government policy as well as due to public transport efficiency being a matter of national interest. A number of conditions have also been set in place, such as the need to dispose of all data upon termination of engagement. It has also been emphasized that the end-user has to give one’s consent prior to allowing the access of said data.

Nevertheless, GRTU intends to follow this matter and raise its concerns formally with the relevant authorities responsible for fair competition, such as the MCCAA and its respective Ministry.

Despite the assurances given upon the data protection concerns, GRTU still considers this access to data as highly valuable and to which any such direct or indirect competitors cannot have similar access to. There may be other transport companies competing for the same possible clientele, such as for instance, chauffeur-driven cabs or minivan service, which may be interested in advertising targeted services to specific segments of society or to design similar bundle offers to their clients, but who may not have this similar allowance to access personal data from national databases even if consent is given. There may also be other business initiatives in other commercial sectors apart from transport which would benefit greatly from such possible access to data.

At the end of the day, in this particular case, there are private interests and commercial activity irrespective of the fact that the sector of operation is one described as related to government policy and national interest. GRTU shall continue to insist that the principles of fairness and equal access to opportunity are safeguarded.

 

 

GRTU is requesting the Government to take into consideration the business community of the area and not just the residents, in relation to the University that is being planned for the South of Malta.

The GRTU advises that any such project that involves the acquisition of areas of land through advantageous conditions should be subject to clear and stringent parameters on how the land should be utilized.

The GRTU expects that any dealings and contracts entered into for the setting up of this University do not provide for any possibility, in the near or long term, of using the acquired land for retail areas or shopping complexes.

It is being understood that the advantages related to land given to investors is strictly for the setting up of the university and not of using the area to derive commercial advantages through other uses. Malta has enough retail areas and shopping complexes and including retail investment in such a project will not only not bring any added value but will negatively effect businesses in the vicinity.

GRTU is making this observation because in a similar case, the land around the Malta International Airport was not only used for the airport and ancillary services but was also developed commercially to house offices and on a number of occasions developing the area into a shopping mall was also considered.

Therefore GRTU insists that any new revenue that will be generated through the University project should revitalize the South in its totality and this includes the business community of the area.

 

Increasing pension capping for business owners and self-employed amongst GRTU proposals for business-friendly pensions reform

A fairer capping for self-employed and business-owners

GRTU believes that a more realistic approach specifically addressing the self-employed and business owners is required. Our self-employed and business owners have not only contributed heftily in financial terms over the years, but are also the main drivers of economic development and job creation. Their contribution must be acknowledged and translated into the pension they have contributed for and deserve. The current system is unjust especially when considering that other sectors of society, such as former Members of Parliament, are treated differently with no maximum capping on their pension. This measure should not only ensure a fairer pension to this sector of society but also disincentivise under-claiming of income, upon which an individual is to be taxed.

A system which is sensitive to self-employed’s realities

A thorough reform needs to take into consideration the context of self-employed which, in GRTU’s opinion, requires specific measures to reflect their reality. On these lines GRTU proposes allowing self-employed persons to retire early for cases where they are close to their retirement age and their business is no longer feasible.  Another measure would be of exempting self-employed persons from having to stop working for one year when the opt-outoption is taken. 

Worthwhile incentives are necessary to push forward diversification efforts

Incentives and measures being put forward need to be financially viable if take-up is to be registered once implementation is transposed from paper into practice. Some of the incentives proposed in the reform may seem welcoming on paper but do not make financial sense for end-users. Recommendation 13 suggests opting to renounce pensions for a minor permanent increase. In practice however it would take too long to recuperate the renounced pension itself.

An effective measure that GRTU believes would really incentivise pensioners to remain active in the labour market is the reduction or removal of taxation on pensions for working pensioners, or removal of NI contributions.

In itself however, the drive towards highering the working age, whether through incentives or imposed, also comes with its concerns. These may include sector-sensitivity matters based on issues such as the extent of physical activity or health hazards this may pose on ageing persons; as well as issues related to productivity and career opportunities.

Holistic reform

A stronger overall reform is necessary to sustain first pillar pensions whilst incentivising diversification.

GRTU believes that a long-term approach is needed to start addressing seriously the sustainability of the pensions system in the context of its social importance along with its economic viability.  The change must be gradual however change to the status quo is necessary. Postponing will only make matters worse and make change more difficult and costly.

 

Last Friday Minister Edward Scicluna presented economic figures, projections and Government’s vision to the MCESD members.

The Minister said that the Budget is not a simple accounting exercise but it sets out the direction Government is aiming at. As such the pre-budget document is entitled ‘delivering our vision’.

The Minister said that competitiveness is one of the only parameter on which we have control and maintaining the competitiveness of our enterprises and higher level of productivity is key. This is something the Budget will be addressing.

In addition, the investment priorities of the Government were outlined:

Reforming institutions, employability through education, green economy, energy, health, Gozo and social inclusion.

GRTU CEO Abigail Psaila Mamo acknowledged the positive figures and economic projections outlined in the document however she stated that as usual one will have to see what measures these will translate into in the Budget itself. The CEO also said that once again the problem of bureaucracy and malfunctions of the public administration was on the Budget agenda. So far we have not been successful in making changes that matter in this area, this is something we and our members battle with on a daily basis and it is the main reason our country ranks so poorly. The Government had even appointed a Commissioner to tackle bureaucracy and simplification however we found that the Commissioner’s powers were limited to sending proposals.

 

It has become very evident that a considerable number of foreigners, in particular Sicilians,have set up various cafeterias and restaurants in a number of touristic areas around Malta especially in the areas of St. Julians, Sliema, Valletta and Bugibba. The reason being that with the right of moving freely in the EU these individuals can come over to avoid the current financial crisis being experience in Sicily which is affecting their tourist and business sectors.

On the matter GRTU President Philip Fenech has expressed his concern that the products being sold from these businesses are not obtained from local suppliers but attained from Sicily. It transpires that through this practice these individuals may not necessarily be paying tax in both Malta and Sicily which is a detriment to local business as this creates unfair competition. One must also look into the notion that most of these businesses are employing Sicilians which may perhaps not be registered with appropriate authorities which could also affect the legitimacy of operations.

GRTU  urges authorities to carry out regular inspections to monitor any abuse that might be taking place.

 

 

In general GRTU sees the proposed changes as positive since no additional costs are envisaged and the proposal aims at minimising bureaucracy. Another positive proposal being put forward is that the time window for objections will be limited to 30 days, this we believe should accelerate the process.

GRTU has however also a number of reservations and feels that a number of elements require clarification.

BOARD

GRTU believes that the interests represented on the Planning Authority Board should be balanced. As such it is important that apart from eNGOs, there would also be members representing the interest of enterprises represented on the board. GRTU believes that an organisation such as GRTU should sit on the board because it represents a wide range of interests and users of the Authority’s service. These range from interests in normal commercial development, specific groups for which there are specific policies as well as horizontal issues such as renewable energy and energy conservation.    

PLANS AND POLICIES

It appears that the acts propose for the plans and policies to no longer be binding and the element of discretion is to become prevalent. GRTU feels this will drastically weaken the applicant position even when the case is taken to court.

It is important that businesses have a certain amount of assurance in the policies they are applying under and the human element is limited as much as possible in decision taking to avoid discrimination and injustice.

MERGER OF THE MALTA RESOURCES AUTHORITY (MRA) AND ENVIRONMENT AUTHORITY (EA)

The MRA/EA merger requires more clarity. From information gathered during the public consultation meeting it appears that this new merged authority will be an Environment and Resources Authority (ERA). This however  is not explained clearly in the acts.

GRTU feels that so far unfortunately, having the functions of a regulator and promoter of renewable energy within the same authority has not reached the desired results. Year after year Malta classifies in the last positions with regards to renewable energy levels as a percentage of total energy and compared with fossil fuel derived energy, in all forms and shapes. To make matters worse, not only has Malta been regressive enough to negotiate and lower its E.U. 2020 targets, but this year Eurostat has even reported an increase in emissions in Malta by 2.5%, 1 of only 6 E.U. countries to report a rise.

With supply and uptake of schemes repeatedly over-subscribed, it is clear the weak link is promotion of relatively new technologies such as Combined Heat and Power technology, heat pumps and Geo-thermal.

Promotion of the renewable energy sector has to be done in cooperation and partnership with the private sector (through a PPP for example) as the sector that constantly seeks to introduce innovative technologies and comes up with innovative ideas. When it comes to promotion we need to be proactive and stop hiding behind the bureaucratic structure. GRTU alone has been actively and successfully promoting the renewable energy sector for the last five years.

OUTLINE PERMITS

GRTU notes that the possibility to obtain an Outline Permit is being re-introduced. Whilst GRTU views this as a positive move, it has reservations regarding the weight being given to such permits. GRTU believes that once an outline permit is issued, this should become binding. The difference between the outline permit as proposed and a full development permit is just the fees paid to the PA. Therefore once an outline permit is issued, a permit upon which entrepreneurs might base important and costly decisions such as the acquisition of property, it should become irrevocable and the applicant should only be asked to pay the PA fees.

REGULARISATION

Regularisation is a very delicate issue and this should be implemented very carefully, through the most transparent and fairest methods.  GRTU believes that this should also be done in full respect to our cultural heritage.

CONFLICTING AUTHORITIES

It is being proposed that the PA may ignore negative recommendations made by other authorities such as the MTA, the Cultural Heritage Superintendent, the Environmental Health Dept. and other entities. GRTU would like a clarification on what happens when one of these authorities objects to a permit which the PA approves of. Will these authorities be obliged to issue their respective licenses for a business to operate?

Would the Cultural Heritage Superintendent, who has the power to stop a development even if this has the necessary permit by the PA be able to use this power?

NATIONAL INTEREST

In article 72 (3) of the planning and development act, it is proposed that the minister may override the PA if a project is deemed of ‘national interest’. GRTU is not in agreement that a Minister should have such powers.

 

GRTU is proud to announce its new collaboration with the high profile, market-leading publication, The Executive business journal. Through this new venture GRTU will now be extending the services it offers to its members with key contributions targeted at the Maltese business community through printed media.

The agreement was signed by GRTU’s CEO Abigail Psaila Mamo together with the group’s Managing Publisher, and Editor Jason Attard.

The signing of a collaboration agreement was witnessed by leading Maltese businessmen during an event organised by iMNG group, which consists of Effective Marketing Ltd and iMNG Ltd.

This synergy is set to strengthen both the publication distribution network as well as the branding and communication objectives of the GRTU.

The first issue of The Executive business journal where GRTU’s contributions will be featured is set to be released in September.

We urge GRTU members to support this collaboration. For advertising within the GRTU pages kindly contact Effective Marketing Ltd on 20107775or on .