Shop owners would pay just 10 per cent in income tax on their first €50,000 of operating profit under a Nationalist Party retail sector plan unveiled today.

The PN said that its tax proposal for small traders would save retailers anything from €3,595 to €12,500, with self-employed or sole traders saving an average of €5,000 a year. It pledged to introduce the measure in its first budget if elected into government.

For retailers to qualify for the 10 per cent income tax incentive, they must prove that their workers are not exploited, that they are improving environmental and energy-efficiency standards every year, that they are fully compliant fiscally and that they provide a “social contribution” to their local community.

The tax credit would only be made available to SMEs, with the PN saying proposals to incentivise larger firms would be announced in due course.

It estimated that the measure would cost taxpayers around €85 million, arguing that the investment would “spur a new wave of economic growth” and take Malta’s retail industry “to its next stage.”

The PN’s retail sector plan (see PDF below) includes 51 policy measures which it pledged would be introduced within 3 years of taking office.

Proposals include measures to support further investment by retailers in their business and staff, make the retail sector more efficient and ready for digital marketplaces, and making shopping easier and more enticing for customers.

Incentives for retailers

Excise duties on products such as cosmetics and toiletries introduced by the current administration would be removed and traders would be offered lower water and electricity tariffs, with the PN saying it would opt to buy electricity from the interconnector rather than the Electrogas power station.

The PN document argues that boosting retail trade will spur economic growth across the board.

The PN document also pledges to stamp out unlicenced vendors and illicit trading, “that all too often make a killing in the local market without proper registration and the evasion of fiscal dues, at the expense of responsible retailers who abide by the law.”

Free childcare services would be extended across the board and not limited to women who joined the labour force, with facilities added to retail zones to cater for the children of traders and their employees.

The PN is also proposing introducing a system to allow retail outlet deliveries to be bunched together and delivered at off-peak hours, reducing traffic congestion.

Local artisans would be supported to expand their range of products, and access to retail areas would be made easier for cruise liner passengers.

The document calls for a complete overhaul of open-air markets.

The PN document gives its blessing to extended hour events organised by local councils, and argues that ‘retail for purpose’ outlets such as charity shops, fair trade stores and healthy lifestyle outlets should be incentivised.

It calls for a greater focus to attract high-end luxury brands to the Maltese islands and pledges that a PN administration would position Malta on “global shopping destination circuits” and attact affluent retail customers to the country.

E-retailers would be helped to deliver their goods overseas, and bricks-and-mortar stores would be encouraged to embrace digital marketing techniques, e-commerce and the use of mobile apps.

Retail areas

The PN plan also includes proposals to better develop and liven up retail zones.

Retailers who choose to set up shop in areas targeted for urban regeneration will benefit from lower property taxes, while the owners of commercial properties in such areas will pay lower rates of income tax on rent.

Specialised themed retail districts with specialised opening hours would be created, grouping retailers who work in similar markets.

VAT revenue collected from retail activities in any given locality would be ringfenced and allocated to improve and manage infrastructure in that locality, improving residents’ quality of life while reducing local councils’ financial burden.

Open air markets would undergo a “complete overhaul and revival”, with aesthetic guidelines, proper marketing and a more commercial function.

Preferential rental rates would be made available for historic and scheduled buildings in urban conservation areas to be turned into flagship retail stores or artisan retailers.

Human resources

The PN is also calling for the creation of an International Retail Academy at MCAST, with dedicated academic courses in retail-related sectors, and for retailers’ lobby group GRTU to be given a hand in educating youths on the attractiveness of choosing retailing as a career path.

A dedicated public agency for the retail sector will consolidate existing retail-related public sector services, and any bureaucratic procedure that cannot be made available online will be scrapped and replaced with a digital-friendly alternative.

The PN said it intends to submit its proposals to public consultation, with individual retailers urged to submit their ideas and feedback to retailers@pn.org.mt. Once finalised, the PN envisions assigning each social partner responsibility for a priority area, with the GRTU invited to lead the project.