PN Launches Plan For Tax System Not To Discriminate Against Maltese Businesses
The Nationalist Party has announced details of a plan to revamp Malta’s taxation system to stop it from discriminating against Maltese businesses.
Through the proposal, launched in the PN’s 2022 election manifesto, the corporate taxation rate will be slashed from 35% to 15% for the first €500,000 of income that is reinvested in the business.
However, there is a catch; businesses who wish to benefit from this lower tax rate must first ensure they comply with a set environmental, social and good governance(ESG) requirements.
Over a five-year period, businesses compliant with ESGs will also see their maximum taxation rate drop from 35% to 25%.
Under the PN’s plan, ESG-compliant businesses who earn under €5 million in a financial year, who employ fewer than 250 full-time people and whose balance sheets don’t exceed €10 million won’t even need to present audited financial statements as part of their company requirements.
Instead, they will be able to present their accounts, along with a certificate to prove that they’re in conformity with ESG criteria.
The PN’s proposal is essentially a new social pact with businesses – if they improve their operations in a manner that helps the nation reach its climate change goals, the government will reward them with several advantages.
While Maltese businesses must abide by a 35% corporate tax rate, foreign businesses can benefit from a full imitation system that effectively slashes their tax rate to single digits.
Therefore, Maltese businesses are hit with a double whammy – forced into on of the EU’s highest tax rate and forced to compete with businesses on their shores who can benefit from more advantageous rates.
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