TCN measures risk ‘mammothing’ the human resource challenge in catering establishment sector – association

The Association of Catering Establishments (ACE) described the Budget 2027 that was announced last Monday as “bittersweet.”

“Specific measures including the super bonus to be given to all workers by April next year is certainly music to every worker’s ears.”

It welcomed the reduction in corporate tax rate from 35 per cent to 25 per cent for companies with an annual turnover of €1 million or less and the new VAT guidelines to clarify the VAT exemption on food, specifically focusing on ready-to-eat retail food. The association described these as two key commendable and necessary measures which will positively impact on the catering industry.

“Yet other measures announced are of serious concern for catering establishments. Of major concern are the measures announced regarding Third Country Nationals (TCNs). Recent National Statistics Office data has outlined Malta’s catering and hospitality industry’s heavy reliance on TCNs. The dependence is not an act of convenience but rather a reality due to a heavy shortage the industry experiences on a daily basis.”

The measures announced risk mammothing the challenge of human resource shortage within the sector, it said.

It added that the measures announced add further financial burden on every operator in the industry.

“Whilst ACE remains in favour of local talent, the budget does not outline educational measures which will support a further influx of local talent into the industry. The absence of reskilling and upskilling measures as well as other incentives to students pursuing a career in the sector were a must as a counter balance to the TCN measures announced.”

The association is also concerned about the measures targeting tourists.

“Whilst ACE agrees in principle on the Government’s drive to increase quality tourists, the introduction of eco-contribution alone will not ensure such influx. The budget falls short of the necessary infrastructural measures required to focus the country’s tourism strategy towards such segment.”

A case in point is the lack of reference to the perennial infrastructural issues concerning key tourism areas including Paceville, Sliema and Valletta, it said.

“Whilst the increase in quality tourism is a must, the retention of a steady flow of mass tourism needs to be retained. The eco-contributions announced last Monday risk to impinge negatively on such flow.”

“Whilst Budget 2027 is a clear exercise by Government to address key issues which have for years been swept under the rug, measures should not be limited to a fiscal exercise, but rather balance such measures with tangible actions which will counter their impact. The fiscal exercise alone risks resulting into a dangerous game of Russian roulette which the industry and the country at large cannot afford.”