GRTU addresses black economy in budget proposals

Presenting the Chamber's proposals for the Budget 2012, director general Vince Farrugia said the GRTU's proposals include strategies to be implemented for economic growth in a balanced and just way.

Farrugia said that a major issue for GRTU members is the black economy that the government appears to be "blatantly" ignoring.

"The government knows who they are and what products they are selling. However, it is not doing anything to stop them to the detriment of legit traders," Farrugia said.

GRTU are proposing that an enforcement authority should be created under the newly established consolidated VAT, customs and Inland Revenue "that would be responsible for a fair and level playing field."

“The lack of this authority will further entice black market economies which have reached unprecedented proportions, economies that are evading any form of fiscal liabilities,” Farrugia said.

Random searches should be carried out on trucks and containers which might be carrying illegitimate products: "Being an insular island, we are prone to movement of goods and services which are not checked and monitored by competent authorities. This also creates hardship for those abiding to the lawful fiscal regime of Malta."

Farrugia cautiously pointed out that they are not proposing police monitoring at every corner but rather sufficient services “to  protect honest businessmen”.

On the small enterprise sector, the GRTU proposed a new Small Enterprises Finance Guarantee (SEFG) scheme supported by a fund of €50 million preferably managed by a separate organisation instead of the Malta Enterprise.

The fund will only issue loan guarantees to facilitate additional commercial lending and lenders will be in control of decisions regarding the use of SEFG, eligibility and lending terms in individual cases.

“The government will no longer be responsible for offering bank guarantees. Loan applications would first be assed via that lender’s own commercial criteria before agreements are made with the government. Business would then present their proposals with approved lending institutions,” Farrugia said.

The GRTU also proposed that the CVA legislation in Valletta should be reviewed in order to alleviate the burden on retailers in the city which have been “drastically affected by the continuous works of regeneration and… other construction projects”.

The Union proposed that the CVA should only be charged between 09:00 and 13:00 only and parking spaces taken up by Parliament should be eliminated to increase blue and white spaces.

“A special tax reduction for Valletta based Commercial Establishment should be made taking the last three years into consideration. It is currently those who have not invested a cent in Valletta that are reaping the benefits from the current situation. The retails in Valletta require substantial investments to make sure that the established businesses continue to survive,” GRTU proposed.

Farrugia said that small businesses are finding difficulties in recruiting Maltese workers and schemes operated by the Employment and Training Corporation (ETC) are “increasingly bureaucratic in their implementation and reimbursement procedures causing more small enterprises to employ other EU nationals to fill temporary and part-time employment positions”.

The GRTU proposed that all EU nationals employed on a temporary basis are immediately registered electronically and have a 15% to 20% deduction from their wages withheld by the employer as payment for income tax and social contribution.

Emphasising the need to limit the impact of measures on end consumer bills, GRTU proposed an immediate price reduction of 50% for three phase applications affected by Small and Medium Enterprises (SMEs) employing more than one person in the first year or for planned business expansion.

GRTU also proposed that the rent of water meters by SMEs should be completely abolished while increasing the water rate per cubic meter and charging users pay per use.

Agreeing with the increased pension age to 65 years, Farrugia said the GRTU proposed that flexible retirement should also be encouraged through incentives so that those who are still fit and willing to work should be able to do so while also revising the retirement age every 5 years in line with “changes to life expectancy”.

“The GRTU is also in favour of creating a National Pension Fund directly linking the pension to the individual. A basic pension and a second additional and optional set of supplements should be available allowing individuals to choose from different prices and packages,” Farrugia said.

The GRTU emphasised the importance of the administration of the fund and the government should be responsible to safeguard the funds and ensure that funds are distributed.

“GRTU emphasis that the fund must not undergo any kind of privatisation, it must however be governed by the same rules governing a private enterprise,” Farrugia stressed.

Briefly mentioning female participation in the labour market, the GRTU proposed a tax benefit scheme for those benefiting from child care facilities while extending this to cover child minding in a home setting and encourage women to recruit help.

The GRTU also proposed the review child care centre standards to encourage the set up of child care centres in high population density areas because it is currently impossible to open child care centres with requirements needed.