Income tax reform to provide for set-offs

The government would be carrying out a reform of the Inland Revenue Department before presenting a Bill on taxation (income tax and VAT) sets-offs for SMEs, Parliamentary Secretary Jason Azzopardi told Parliament yesterday.

Winding up the debate on the Small Business Bill, Dr Azzopardi said that between 2008 and March this year, Malta Enterprise had approved 109 projects with a total investment of €211 million generating 2,687 jobs over the next three years.

He criticised the opposition for trying to give the impression that it did not understand the Bill and accused it of deceit in interpreting it. He claimed it did not have any alternative for the sector.

Dr Azzopardi denied that the new structures, including the College of Regulators, would be in conflict with existing boards or committees such as the Malta Council for Economic and Social Development.

While the MCESD advises the government on the economy and serves as a structure for dialogue among the social partners, the proposed College of Regulators, originally proposed by the GRTU, would be meeting every few months and serve as a communication channel between government entities and SMEs leading to a reduction in bureaucracy.

The Business Support Centre, which served as a one-stop-shop, would be launched after summer soon after Malta Enterprise would move to its new premises in Guardamangia. The centre would support start ups giving also other holistic support as part of its obligations. Malta Enterprise had already signed 20 service level agreements with government entities.

He said the micro credit investment scheme, amounting to €51.5 million, would be spread over the next four years. The scheme, administered by the Bank of Valletta, had already attracted 120 SMEs to ask for loans at subsidised interest rates amounting to €15 million. Under the scheme 276 new jobs were created in 2010 with a tax credit of €5.2 million.

The Parliamentary Secretary said that in its 22-month period in government, Labour had failed to lead SMEs but these passed through times of uncertainty and instability with licences for new businesses decreasing. While a net increase of 542 new licences had been registered before October 1996 these dropped over the next three years, increasing again in 1999 under a new PN government.

Dr Azzopardi said licences for new businesses increased by 775 in 2008, 854 in 2009 and 1,010 in 2010.

The government would be taking up a suggestion by the former Parliamentary Secretary Edwin Vassallo, responsible for SMEs, to include in the introduction of the Bill a reference to the European charter for the self employed.

Dr Azzopardi said the Bill had been praised by EC Vice-President Antonio Tajani while the EC had also forecast that Malta would be able to decrease its deficit much before the next 24 months as required by the commission.