Prime Minister Robert Abela has said that the proposed corporate tax reforms are set to make Malta’s business model “even more competitive” than it already is.
He was speaking during EY Malta’s Malta Future Realised Conference, an event focused on presenting the corporate service provider’s results from its 19th Attractiveness Survey.
Dr Abela stressed that Government’s primary aim is to safeguard Malta’s future and to make it “bright”.
“We need to take the right decisions to be on top of the challenges ahead, answering them, rather than fearing the consequences,” he said.
“Recent years have seen our economy facing a repeated cycle of challenges that have cemented our reputation as being one of the most resilient nations in the world,” Dr Abela continued.
He noted that this has come despite a number of macroeconomic challenges, such as the COVID-19 pandemic, surges in energy and commodity prices, the war in Ukraine, together with the recent escalation of hostilities in the Middle East.
He highlighted that “numbers speak louder than words”, stating that Malta’s GDP is 15 per cent larger than it was in 2018. He proceeded to compare this to other European countries, stressing that Malta has continued to experience growth even turbulent times.
Dr Abela attributed Malta’s “superior economic performance” to an economy that proved to be “agile, nimble and dynamic”.
Turning to the results from EY Malta’s Attractiveness Survey more specifically, he said that the findings are “very encouraging”.
“Most firms clearly see their future here in Malta. They recognise our vision and find Malta to be more attractive for investment than our European peers. They are also putting their money where their mouth is, upskilling their workforce,” he affirmed.
Dr Abela added that labour challenges such as skills shortages are issues that Government “will not shy away from”, aiming to instead transform them into “opportunities”.
In this respect, he called upon Malta’s increased digitalisation efforts, quoting the European Commission by saying that the nation has become “Europe’s crown jewel for digital transformation”.
Ahead of Monday’s Budget 2024 presentation, he said that Government has five main objectives. These are to support the community amid the “great risks” of current global conditions, to support those most vulnerable in society, preserve fiscal stability, strengthen the economy through adequate supply of skills and manpower, as well as an “overarching commitment” to improve the quality of life in Malta.
One of the major findings of the survey was that corporate tax has remained Malta’s top parameter to attract foreign direct investment (FDI) at 73 per cent, yet respondents also remarked that prospective changes to international tax policies are also the highest risk, sitting at 61 per cent.
Government has indicated that it plans to update its corporate tax regime, with the OECD pushing to implement a minimum global corporate tax of 15 per cent for multinationals earning more than €750 million in revenue annually. This is expected to impact close to 700 multinationals based in Malta. Distinct from the global minimum corporate tax push for large multinationals, there is separate drive to update Malta’s corporate tax regime, away from the current imputation system.
He added that EY Malta’s survey confirms that most investors consider Malta’s current tax system as “one of the key strengths” of the country’s business model.
“With the reforms, you will still feel the same strength, possibly even better, making our business model possibly even more competitive with our economic reality,” he added.
He concluded that the 10 last years have seen Malta’s economy “achieve a lot” due to collaboration between the business community, yet he emphasised that he still believes it has the “potential to do even better”.
Since its inception, the Family Business Office has been instrumental in highlighting the needs of family-run enterprises in Malta.
Seat Load Factor also stood strong during the period, with an increase of 6.8% when compared to 2019
During the last few months, Enemalta continued its efforts as part of its six-year plan