A €10 million micro-credit fund will be set up to grant SMEs and the self-employed loans of up to €25,000 at "advantageous" interest rates. Nearly 1,500 small businesses could benefit through the necessary liquidity for investment.
The credit will not require the same collateral as that requested by banks.
If the demand justifies the investment, the European Investment Bank is prepared to provide a further €10 million to the fund.
Microfinance involves providing financial services to low-income clients, small businesses and the self-employed that traditionally lack access to banking and related services.
Last July, the European Commission launched a €100 million microfinance facility to provide credit to small firms and to those who have lost their jobs and wanted to start up on their own. The Commission had said the new Progress Microfinance Facility should be operational by next year.
Small business will benefit further from a 40-per-cent tax credit up to a maximum of €25,000 if over the next two years they invest in upgrading their premises, machinery, technology, and energy-efficient systems.
The tax credit is earmarked for self-employed and enterprises of up to 10 workers, and sole traders. It also covers investments by small firms to comply with health, safety, environment and physical access regulations. Businesses creating new jobs or recruiting apprentices from today are also eligible.
Small Gozitan firms will be entitled to a 60-per-cent tax credit.
A €200,000 fund will be set up to help trade and craft enterprises to sustain their sector.
Meanwhile, the government plans to put forward a draft law on small enterprises and establish a Consultative Council for Enterprise to serve as a forum between authorities, regulators and business sectors. Following legal amendments, authorities will no longer request information from enterprises which the government already possesses.
The business licensing system will be improved and simplified.
A framework allowing SMEs to obtain more support to conform with regulations of the Employment and Training Corporation, the Malta Standards Authority and the Occupational Health and Safety Authority, will be set up by March.
The government will establish which departments and public entities should adjust their opening hours to serve businesses better. They will be bound to carry out independent research with their clients to establish how services can be improved.
The departments of VAT, Inland Revenue and Customs will merge to create a new entity to step up the fight against evasion, contraband and other crime that was negatively impacting government revenue.
Apart from being able to offer better services to clients, the different sections of this new entity will be better able to enforce legislation and information gathered by fiscal entities.
From June no refunds for VAT and income tax will be handed out unless all returns under both systems have been filed.