CC COVER STORY
Budget 2018: A Budget for the best of times? The much-awaited Budget 2018 was rolled out in a period of financial and economic buoyancy, with Maltese coffers showing a steadily increasing surplus. But, does the scope of its proposals maximise potential for the economy and business at large? Rebecca Anastasi looks at the key features.
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he current upswing in economic growth, which, according to Government, saw a surplus of more than €100 million registered in 2016 and is expected to rise as indicated by the preliminary figures for 2017, was underlined ahead of the 2018 Budget speech. Words like ‘economic miracle’, ‘unprecedented growth rates’ and ‘improving quality of life’ were all used in the pre-Budget document, with Malta’s economic performance exceeding expectations for 2016. This promised to be a Budget for the best of times; one guaranteeing sustainable growth. Indeed, the proposals unveiled by Finance Minister Edward Scicluna attempt to capitalise on the current economic resilience, while investing in the necessary infrastructure to guarantee a long-term future. Measures designed to enhance competitiveness, invest in new industries and opportunities post-Brexit, as well as cater
OCTOBER/NOVEMBER 2017
to specific sectors, such as pharmaceuticals and Gozitan enterprises, were all outlined. Initiatives will also be implemented in a drive to increase spending power, while cash will be poured into infrastructural development, though time will tell whether the latter is a case of ‘too little, too late’ or if these motions, working in tandem, are characterised by strong fundamentals which will maximise potential. New industries and Brexit A major theme of the Budget 2018 speech was the necessity to transform Malta into a centre of excellence which attracts new industries and foreign investment, guaranteeing that the islands remain competitive in an increasingly bullish global economy. Next year will see the introduction of the VAT grouping concept for the financial services and the remote gaming sectors, allowing entities having an independent
legal personality and a Maltese fixed establishment with a common financial, economic and organisational relationship to register as a single taxable person for the purposes of VAT. As a result, supplies between members of the same VAT group will be regarded as falling outside the scope of VAT. A new regulatory framework will be launched next year to provide further incentives for growth in the remote gaming sector, while a taskforce has been established to evaluate the implementation of a national blockchain strategy. Training initiatives for public sector employees in this sector will be organised while Government will launch a web portal to serve as a communication tool for those interested in blockchain and cryptocurrencies. The plan is to create a Blockchain Hub in Malta and, to make this a reality, start-ups investing in blockchain technology will be given the support and assistance required. 11