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MEA calls for temporary reduction in VAT to kickstart Maltese economy

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Businesses resisting layoffs but will reconsider decisions if situation persists – MEA Survey

While most companies were doing their best efforts to keep all employees, 28% had placed a number of workers on unpaid leave. Only 9% of companies surveyed have so far laid off workers. Malta Employers Association Director General Joseph Farrugia announced this while sharing details of a survey carried out in the past days by the employer body to gauge members’ feedback on the current economic situation and government’s incentives.

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Director General Joseph Farrugia said that 346 companies participated in this survey, coming from different economic sectors, including manufacturing, hospitality, retail, gaming and financial services sector, reflecting the wide-ranging membership of the MEA. These companies employ between them around 40,000 employees. 60% of companies surveyed said that all or some of employees have been given a reduced working schedule.

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20% of the companies have asked their employees to take all leave available to them.

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Farrugia said that a number of companies who had terminated jobs’ employees were not covered by Government’s definition of Annex A and B and were therefore not eligible for any assistance.

31% of those who participated in the survey said that should the crisis extend beyond May, they will have to consider redundancies. In this context, the MEA called on Government to extend the current schemes, particularly wage support, to a wider range of companies that have been impacted by the crisis, irrespective of the sector in which they operate.

In order to boost business, the MEA is calling for a temporary revision in VAT rates to help kickstart the economy as well as a reduction in utility tariffs, particularly in consideration of lower energy prices.

On a positive note, Farrugia noted that 18% of the companies took this opportunities to introduce e-commerce facilities.

When asked about government incentives so far, a large chunk of respondents (38%) indicated that the assistance provided was ineffective. Only 18% have found the schemes effecive, noted Farrugia, while clarifying that respondents who are currently not eligible for funding could have replied to this particular query.

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Another element that transpired from this survey related to difficulties in renewing permits for third country nationals. This can create social problems, insisted Joe Farrugia.

Addressing a recent controversy, Farrugia described as “fake news” reports that the MEA had called for salary cuts throughout the public sector, but merely in those situations, where workers were completely idle.

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