Dalli announces tax credit on
No gimmick, this is a serious measure
by Matthew Vella
Finance Minister John Dalli yesterday announced that all profits of
the self employed and small enterprises pulling in sales of not more
than Lm250,000 per annum in 2002 will be eligible for a tax credit when
these profits are spent for investment purposes.
"This could be for the purchase of new machinery, for production
innovation or even equipment used in the office," Minister Dalli
said at the Finance Ministry in Valletta.
"This is a serious measure, it is no tax holiday gimmick. It was
discussed with all the members of the Malta Council for Economic and
Social Development, as all budget proposals were. Unfortunately, the
Labour Party was not present for these meetings."
Dalli said all self-employed and small enterprises with a turnover of
not more than Lm250,000 will be eligible for the tax credit on profits
for investment purposes, covering the wider span of the local economy.
Dalli said this measure would increase competitiveness and serve to
create more jobs in the long run.
"This measure has already been put into operation, with profits
made in the 2002 base year already being taken into consideration. The
tax due will be assessed normally as usual, but entrepreneurs who will
be committing themselves to investment spending projects until 2009,
will be eligible for this tax credit."
The tax credit and investment spending evaluation will be conducted
through a joint-collaboration between the Institute for the Promotion
of Small Enterprise and Inland Revenue.
IPSE will be assessing these proposals and asserting their worth and
tax credit will be paid out when investment spending will be committed.
"These are not handouts," Minister Dalli said, "this
is economic sense."
Dalli also announced that bad debts up to Lm500 per invoice and which
are 24 months overdue will be made payable from the turnover of the
debtor. Procedures are underway to ensure that such bad debts are repaid
every year in the form of two per cent of the debtors turnover.
Following up from last weeks announcement on tax penalties, Minister
Dalli said the Ministry had received positive feedback from taxpayers
who today are benefiting from less stricter penalties.
"Today we have managed to instil a culture of prompt taxpaying,
with 93 per cent filling in their tax returns. We have managed to collect
Lm196 million in taxes, and only Lm40 million are arrears. All arrears
since 1998 up till know have been paid. In 2002 we paid out Lm14 million
in arrears and these are always decreasing."
Dalli said the additional tax paid on late tax returns or other mistakes
in the tax return would start being decreased drastically, with up to
90 per cent of additional tax removed on genuine mistakes within the
Dalli however said that acts of carelessness or fraud would not be classified
as mistakes and would not be eligible for a penalty reduction.
"With 93 per cent filling in their tax returns, this culture of
punctuality is being rewarded by having these penalties decreased,"