Author: SME Chamber

Chamber of SMEs say sector needs more COVID-19 aid

A €1 million aid package for bars and clubs isn’t enough to sustain the hundreds forced to close due to COVID-19 until February, the Malta Chamber of SMEs has warned.

The chamber is in talks with the government to try to increase the assistance, announced by Prime Minister Robert Abela on New Year’s Eve.

Bars, clubs and band clubs have been closed since October 26 and will remain shut until February as part of measures to stop the spread of the virus.

Abela said further details of the state-aid package would be announced in the coming days but the chamber said the money is not enough, when stretched across approximately 800 establishments.

“In this sense, although it’s a good start and positive, the funding won’t go a long way,” chamber deputy president Philip Fenech said, adding that he hoped through discussions with the relevant authorities they would be able “to settle on a tidy sum” to help bars and clubs start up again.

He said the funding, which will be allocated over and above the wage supplement, can be used as working capital to help businesses replenish their stocks.

There are a number of products that bars and clubs stock that have an expiry date, such as juices and soft drinks, Fenech noted.

“What we have to fine tune in the next few days, and the prime minister said this in a tweet, is the intricacies of how these funds will be distributed,” he said.

“We have to look at this as the size of the bar or club and the number of workers they employ. Bigger clubs and bars obviously had larger losses because they had larger stocks.

“It would be very unfair if we came out with one flat rate for everyone. The best way democratically is to allocate funds according to capacity and size of the venue in question.”

Henri Cauchi, who co-runs the band club Vilhena, in Floriana, said he was “getting worried” about the future, having managed to survive on the €800 supplement thus far.

“This day and age it’s difficult to pay your bills and survive on that,” he said.

“Two of my employees have had to leave, and one of them, a part-timer, is only getting a supplement of €400.

“How can you pay rent on that?”

Cauchi also questioned why bars were forced to close, to restrict crowds gathering, while other venues have been allowed to remain open.

“It’s either we’re all in it together or we’re not. It’s unfair – we were doing very well before this pandemic,” he said.

Source: timesofmalta.com

2021 comes with great expectations.

What the country is experiencing at the moment is consistent with what we have become accustomed to as to the Covid trends.

The festivities offered much less opportunities for the general public to socialize compared to what we were used to however many still got together with their families for an adaptation of their yearly celebration. The amount of interaction surely is incomparable compared to normal times yet it’s not insignificant and this impact on Covid numbers is something we as a Chamber have been foreseeing.

It is however important that we make all efforts possible at this crucial juncture to turn the page. Businesses will not sustain a prolonged period that goes beyond March to restart. The country must aggressively work to get numbers down within a short timeframe.

Covid is no longer new, we are no longer in the unknown. Covid has become mostly predictable, even with the new variant, and is has become a science we should have mastered by this time.

2021 still started with much uncertainly and this is not excusable. We cannot remain passive, we must take concrete action and make plans based on this science.

One might think that there isn’t much one can do but in reality there is much that can be done at national level to give predictability. Many sectors are awaiting from the authorities for their go ahead to start planning a 2021. This is not only true for bars and clubs, which have been closed for months now. This is also true for big sectors of our economy that need to have visibility to plan ahead.

The events sector is one such example. This sector is a major motor of our economy, on which many businesses depend to increase their economic activity – entertainers and performers, clothing and footwear, jewelers and wearing apparel, hair and beauty, transport, organisers and suppliers, etc…

The Maltese economy cannot to have another year like 2020 and if we do not want to have another year like it, clear signals of confidence must be given to businesses.

As the days roll on March continues to approach and little is known of what to expect after, what is for sure is that the expectations are big and these need to be addressed.

A message from Ms Abigail Mamo – CEO Malta Chamber of SMEs

The extent of losses incurred will be calculated by comparing companies’ present VAT returns to those of 2019.

A new version of the wage subsidy scheme based on the level of losses suffered by businesses as a result of COVID-19 was announced on Tuesday.

Minister for Energy and Enterprise Miriam Dalli and Malta Enterprise Chief  Executive Officer Kurt Farrugia told a press conference that assistance would be based on VAT returns as compared to the same period in 2019.

Companies that incurred a loss of less than 9% will no longer be eligible for the wage supplement scheme.

Minister Miriam Dalli said a new feature of the 2021 scheme is that it will also cover worker substitution, in that, for example, if a chef resigned from a restaurant and another was engaged, that restaurant will get the wage supplement for the new chef, back-dated to October. In such cases, the number of workers cannot exceed what was on the company books last May.  This initiative was proposed by the Malta Chamber of SMEs following several comments by members.

The purpose of the scheme, she stressed, was not just to save jobs and help business survive, but to also encourage growth.

“With the onset of vaccines, this is the right time to work on a strategy which not only helps those in need, but also ensures that businesses not only survive, but grow.”

The wage supplement will mean a government outlay of €40m per month, and Dalli pointed out that businesses also benefit from other schemes on their utility tariffs and rents.

Malta Chamber of SMEs President Paul Abela was present during the press conference.

After months of negotiations, the UK and European Union finally agreed a deal that will define their future relationship.

The Ambassadors of the EU Member States have unanimously approved the EU-UK trade cooperation agreement which is set to start at the beginning of the new year.

Nigel Mifsud spoke to the United Kingdom’s High Commissioner for Malta, Cathy Ward, about the effects of the agreement on the Maltese and the British living here.

On the threshold of a new era in the relationship between Malta and the United Kingdom following the agreement reached with the European Union on Christmas Eve, the United Kingdom High Commissioner for Malta, Cathy Ward, said that most things will remain unchanged in the New Year.

She said that according to information obtained from Identity Malta, there are 13,500 citizens from the United Kingdom residing in Malta permanently. She added that they must register by the end of next June so as not to lose their residence rights. So far, half of the British living in Malta have registered.

Regarding travel, Cathy Ward said that upon arrival at a British airport, Maltese will continue to go to an area for European citizens where they will have to wait in a special queue to have their passport stamped.

”After the 1st of January – you will be in another queue when you get to a British airport and get passport stamped but still can travel for up to 6 months visa free, so very little changes. In terms of travel insurance government advises to all travellers generally to have comprehensive travel insurance.”

On the other hand, UK citizens coming to Malta must go to an area for people from third countries, and can travel without a visa if they are not going to stay for more than 3 months.

On roaming charges, the High Commissioner said that while this was not part of the deal, telecom operators said they would leave everything as it was. However she said everyone should check with the respective operators before traveling to and from the UK. Regarding Erasmus, Ward said that although this was not discussed in the new agreement, the UK Government was working to launch an educational program next year that will also benefit Maltese students.

As far as health is concerned, she said that a bilateral agreement will remain in force between the Maltese Government and that of the United Kingdom, which provides for the medical treatment of 180 Maltese per year, in British hospitals, in cases of serious illness. Asked about the European card to be used in case of emergency medical help, the Commissioner said that it could continue to be used.

”EHIC- if you currently have one, it will continue to be valid until it expires. there will be a new one once it expires.. a new card that does exactly the same thing.”

Last year, Malta imported around £ 1.8 billion in goods and services from the UK. The High Commissioner said she hoped the amounts would not change, as she said the agreement to avoid tariffs and quotas between her country and the European Union should lead to no extra costs. However, she said that this depends on the tax rates imposed by European countries, including Malta.

”If you are buying your car from the UK, there will be no change to export cost of the car…but there is the question of the VAT that the Maltese government will apply on that car.”

She said she expects that at first, one has to get used to the new paperwork that will come into play, and businesses have to prepare for it.

The way forward is for the UK Parliament to approve the deal with the European Union on Wednesday, with the Opposition leader already announcing that they will be supporting the deal. The European Parliament is expected to approve the agreement in January.

Source: TVM.com.mt

Transport Malta has recently issued guidelines for car importers and car dealers, of both new and used vehicles imported from the UK and other non-EU countries.

 

The following are the guidelines for the registration process of such vehicles in Malta as of the date in which the United Kingdom (UK) (comprising England, Scotland, Northern Ireland and Wales) leaves the European Union (EU) on the 31st December 2020 (the withdrawal date), in the eventuality that such event occurs without the implementation of a withdrawal agreement.

New guidelines are also available for both new and used vehicles imported from non-EU countries.

1. Registration of new vehicles imported from the UK after the withdrawal date:

a) All new vehicles that are accompanied by a Certificate of Conformity (CoC) referring to a UK type-approval cannot be registered in Malta after the withdrawal date. A UK type-approval may be recognised from the type-approval number or from the type-approval mark “e11” that is shown on the CoC.

b) All new vehicles imported from the UK after the withdrawal date will only be registered in Malta if they are accompanied by a CoC referring to a type-approval issued by a Type-Approval Authority of any other EU member state.

c) Any UK type-approval automotive items cannot be placed on the local market after the withdrawal date.

d) Besides the applicable registration tax, Value Added Tax (VAT), and other fees (such as administration and registration plates fees), new vehicles which will be imported from the UK after the withdrawal date will also be subject to the applicable customs duties (10%) and VAT (18%) upon their registration in Malta.

 

2. Registration of used vehicles imported from the UK and from other non-EU countries after the withdrawal date:

a) After the withdrawal date, all used passenger cars (M1), goods carrying vehicles (N1) and motorcycles (L) registered in and imported from the UK will only be registered in Malta if they are either accompanied by:

i. a registration certificate referring to a type-approval issued by a Type-Approval Authority of any other EU member state; or

ii. a Single/Individual Vehicle Type-Approval Certificate issued by a Technical Service designated by a Type-Approval Authority of any EU member state.

b) All used passenger cars (M1), goods carrying vehicles (N1) and motorcycles (L) registered in the UK on or before the withdrawal date but imported from the UK after the withdrawal date shall continue to be registered in Malta under the same procedure that was applicable before the withdrawal date, and shall therefore not be bound by the conditions stipulated in the preceding paragraph. However, besides the applicable registration tax, VAT, and other fees (such as administration, inspection and registration plates fees), all used vehicles which will be imported from the UK after the withdrawal date will also be subject to the applicable customs duties and VAT.

c) Used passenger cars (M1), goods carrying vehicles (N1) and motorcycles (L) imported from other non-EU countries (such as Japan) will continue to be registered in Malta only if they are accompanied by a Single/Individual Vehicle Type-Approval Certificate issued by a Technical Service designated by a Type-Approval Authority of any EU member state.

d) All the other conditions (Registration and Licensing of Motor Vehicles Regulations (S.L. 368.02)) for the registration of used vehicles in Malta, including those imported from the UK, shall apply. A minimum Registration Tax will also be applicable to all USED M1 vehicles which are five (5) years or older since the date of first registration/manufacture.

e) Vehicles imported from the UK on or before the withdrawal date, can be registered in Malta under the normal procedures. Owners have 30 days to register such vehicles. Therefore:

i. Authorised motor dealers already in possession of USED vehicles imported from the UK, or have such vehicles arriving in Malta by the 31st of December 2020, may register them after the 1st of January 2021 under the normal procedures (i.e. no customs duty or VAT will be applicable); and

ii. Documents (a copy of the Registration Certificate, Notice of Arrival and Invoice) of USED vehicles already in stock and bearing a UK registration plate must be deposited to Transport Malta offices by not later than the 23rd of December 2020.

f) After the withdrawal date (i.e., as from the 1st of January 2021), all used vehicles imported from the UK shall be categorised as used non-EU vehicles. Payment of customs duty and applicable VAT should be made at the Customs office prior to registering such vehicles with Transport Malta.

 

Useful Links:

https://mccaa.org.mt/Section/Content?contentId=3754

https://customs.gov.mt/brexit/notices-by-the-customs-department

Malta Chamber of SMEs officially meets Hon Minister Miriam Dalli

The Malta Chamber of SMEs has officially met new Minister Miriam Dalli to discuss issues falling under her portfolio.

SME Chamber President Paul Abela emphasized how important it is to give businesses the necessary breathing space at the moment, giving them the ability to extend their loan repayments on a long time-frame to give them time to make up for this year.

Mr Abela mentioned Libya as one of the avenues Malta needs to look into in order to make best use of opportunities there for economic regeneration for the good of both countries.

The SME Chamber also emphasised on the need to formalize the economic regeneration plan, including stakeholders and business players in this plan. Businesses should be guided in their investment needs to support the priorities of the country. Aggressive grants should be put in place in order to sustain such investments.

A number of support measures were also discussed in order to set up essential schemes that would help businesses re-invent themselves and change their business models.

The Wage Supplement was another aspect discussed, on which the Minister said that feedback presented by the key stakeholders, including the SME Chamber, was being evaluated and work was ongoing.

Other subjects discussed were Energy Efficient Investments, Tourism and Banking Issues.

Malta Chamber of SMEs and the Minister for Research, Innovation and the Co-ordination of Post COVID-19 Strategy Owen Bonnici agreed on the need to further co-operation between the two entities in favour of research which can be of benefit to small and medium sized enterprises.

In a meeting held between Minister Bonnici and the Malta Chamber of SMEs, they agreed that research can be a game-changer for start-ups and small enterprises in order to apply new systems or solutions which can make a difference in their operations.

Minister Bonnici explained that the government is intent to work hand in hand with the SME Chamber in order to identify more research and innovation solutions which are applicable to small and medium sized companies, so that they can grow and expand.SME Chamber President Paul Abela mentioned how encouraging it is to have a focused Minister for research and innovation, an area Malta has struggled with for a very long time. “We believe that SMEs have a lot to contribute in this area and, with focused efforts, we can together bridge the existing gaps to tap into this essential resource and reach Malta’s targets. This would be an absolute record achievement for Malta.”

A discussion also took place about the co-ordination of the post COVID-19 strategy, and a number of priorities for the furtherance of economic and social progress were discussed.

Brexit: A call for Maltese and Gozitan businesses to maintain ongoing contact with the government on support for their business under Brexit 

As Brexit edges closer, Maltese and Gozitan businesses are being given a helping hand by the government. While the government has been making preparations, Maltese businesses must continue to prepare themselves and express their concerns when they encounter new challenges as a result of the UK leaving the European Union.

This message was conveyed by Minister for Enterprise Miriam Dalli and Parliamentary Secretary for European Funds Stefan Zrinzo Azzopardi during a webinar organised by the Malta Chamber of Small and Medium Enterprises in collaboration with Business First. This was an opportunity for businesses to communicate about the preparations that need to be made and to understand the new realities that Brexit will bring.

During the webinar, it was said that the relationship between the two countries needs to be strengthened and that it is in Malta’s interest to attract British companies or companies with a strong presence in the United Kingdom.

Minister Dalli said that, faced with Brexit, the priority of this government is to reduce negative impacts on business, and for Maltese businesses to make good use of the opportunities that can develop. She added that, in the coming weeks, a specific website will be announced, where information on Brexit will be provided and where operators from the different economic niches can be contacted.

“I urge you to use this practical help, but also to learn about existing aids in the form of incentives, including that of the Business Change and Transformation. Through this scheme, you can receive up to €5,000 as a refund on the costs of business consultants. These incentives can help you adapt your businesses in response to the changes that Brexit will bring about,” Minister Dalli said.

Parliamentary Secretary Stefan Zrinzo Azzopardi reminded that EU laws will cease to apply to the United Kingdom after the 31^st of December 2020. The Parliamentary Secretary held that the government has been working so that departments and agencies are prepared and able to assist businesses in the best possible way. He explained that administrative resources have been increased in entities such as Customs, in order to cope with the increased activity that Brexit will bring. Specific courses aimed at commercial entities are being held to prepare them for the new scenarios. He also referred to other preparations being made by Identity Malta to register British residents in Malta, as well as to the work being done by the Ministry for Health and the Medicines Authority regarding the importation of medicines, 80% of which are imported from the UK.

The Malta Chamber of SMEs’ Chief Executive Abigail Mamo emphasized the importance of preparing businesses for Brexit.

During this webinar, representatives from the Customs Department, MCCAA and Malta Enterprise replied to questions made by particiants.

Anyone wishing for more information should visit the site www.brexit.gov.mt, which is constantly updated with notices and informative material. Direct assistance is being offered to citizens via the Brexit helpline on number 153 and to businesses on the BusinessFirst helpline on number 144. Help is also provided via e-mail on the address , where more individual and specific questions may be addressed.

Covid has necessitated a significant level of close contact with enterprises to monitor the fluid and fluctuating conditions in order to be able to respond with adequate policy proposals.  

The SME Chamber’s latest study, carried out in November, on the state of business highlighted how almost 80% of businesses reported lower levels compared to 2019 with 55% reporting a decrease of over 30%. Another 10% reported staying in the same situation as the previous year and 11% reported an improvement. 

Amongst the sectors experiencing an improvement were those in household goods, finishings and electronics. The sectors that experienced a downturn were the majority, more prominently however Accommodation and Tourism Services, Catering and Restaurants, Clothing Accessories and Jewellery, Entertainment and Events, Weddings and the Leisure sector, Advertising and Marketing, Hair and Beauty, as well as Transport Services. 

Of concern was the feedback received by businesses where close to 40% did not foresee being able to survive for longer than 12 month, all things remaining equal. 37% also said that they were unable to answer this question. 

When asking businesses on whether they were foreseeing making any changes during the coming 6 months, 50% expressed that they had no plans. Other choices which scored highly were Selling and Marketing Online, Diversifying, Reduction in Employees and Downsizing. 9% said that they planned to invest more, as opposed to 7% that planned to close down. 

The results show clearly how heavily the uncertainty was weighing on businesses, 70% ranking it as their biggest concern at the moment. This was followed at 53% by very low turnover, the concern of government aid stopping at 33%, followed closely and by order of ranking, by not having an existent market, paying employees, rental costs, piling debt and increases in bank-related costs. 

When asked about the wage supplement, those benefitting and those not both carried out a degree of layoffs, with a high percentage, in both cases, however saying that they did not lay off anyone.  

In terms of aid necessary and investment priorities, businesses said that grants are a priority as opposed to tax credits or repayable loans. IT solutions, including eCommerce sites, automation software, digital marketing and subscription fees was another priority ranked highly by businesses.  

Apart from investing however businesses also outlined what other support they deem necessary by the government. These included: 

• Help with rental costs 
• Cost of banking facilities 
• Cost of shipping when selling online 
• Government to guide businesses with strategy 
• Relief from piling tax burdens and financial commitments 

The SME Chamber also asked businesses to share their experience in terms of how they mitigated the impact of Covid. At 35%, the majority did not do anything to mitigate. 29% of respondents however said that they came up with special promotions and offers to boost business, 20% started their delivery service, 18% migrated to online, 15% trained employees, 14% refurbished and another 14% diversified their operation. 

Human resources was one of the other big concerns of our members, mostly small and tight knit teams. We have therefore asked businesses to tell us about their struggles, apart from costs, were they experiencing. Highest ranking were the uncertain working environment and employees not feeling that their job is secure, issues with mental health, lack of social contact and low levels of morale.