A national seminar will be held at the end of the month to promote incentives for family businesses and present economic analysis and economic policy.
The development comes after a series of recommendations were presented by the Malta Association of Family Enterprises at the June 20 meeting of the Enterprise Consultative Council. They were mainly related to the sustainable transfer of local family firms through generations.
The ECC brings together representatives of government entities and constituted bodies. Small Business Minister Jason Azzopardi, who chaired the meeting, was very receptive to MAFE’s recommendations, among which was the introduction of a legal definition of the ‘family’ within the family business context and a definition of the term ‘family business’, which will pave the way for legal clarity.
Dr Azzopardi also proposed the establishment of a working group involving representatives of the Ministry for Fair Competition, Small Business, and Consumers, the Ministry of Finance, the Economy and Investment, and MAFE, besides other stakeholders.
The group would propose concrete measures by the end of August or September and issue them for consultation in time for the next budget.
MAFE presented proposals for fiscal incentives for local family businesses, irrespective of size. To allow for a higher rate of successful transfers, MAFE suggested a wider scope to the current tax exemption on transfers by donation to family members.
Proposals were also made for the relief or deferral of tax payable upon any consideration paid by installments so that older generations are able to retire comfortably.
MAFE also proposed a diminution of the base on which stamp duty is calculated and the reduction of stamp duty rates.
MAFE called for the establishment and refinement of the compilation and dissemination of research on family enterprises. The association emphasised the significance of education and training to inform family business owners of the importance of succession planning.
This must go hand in hand with the provision of financial support for the setting up of formal governance structures which support long-term growth and continuity of Malta’s family enterprises, it suggested.
The Finance Ministry’s permanent secretary Alfred Camilleri observed that some government data may be of statistical use in the implementation of policies . He also noted that the long-term gain of many fiscal incentives introduced by the government may outweigh any possible short-term loss of revenue.
Through MAFE’s active involvement and lobbying in the local family business sector, Malta is set to come in line with other developed economies, if not lead the way by virtue of the introduction of a Family Business Act, the association said.