The novel Coronavirus

The novel Coronavirus that has found its new epicentre in Europe has far more reaching implications beyond the health and well-being of global populations. As countries struggle to contain the spread of the virus, social distancing measures and even complete lockdown in countries where the virus has hit hardest, has hugely impacted the livelihoods of SMEs in question, and the risk of mass redundancies.

Malta is no exception and, although the virus has been well-contained thus far, the country's economy is starting to feel the pinge, especially due to Malta's dependency on the tourism industry, which is now at a standstill. The Maltese government issued a mini-budget on Wednesday 18th March to help alleviate some of the pressure on both employers and employees who are most affected by the situation. The main points are summarised below.

Measures for Businesses

• A one-off €350 grant will be given to employers for each employee on quarantine leave. This measure only covers grants for full-time employees. More details about quarantine leave can be found here. 
• In the case of parents who have to look after their kids from home due to school closures,  the government will be covering an additional 2 months of leave for one parent, in the form of an €800 per month benefit, provided that none of the parents are able to work remotely.
• Full-time employees of enterprises who suffered drastically or had to temporarily suspend operations will be entitled to up to five days' salary based on a monthly wage of €800. This includes all self-employed. Part-time employees will be eligible for €500 per month. All businesses in these sectors can apply.
• Full-time employees in adversely-affected sectors will be entitled to one day salary per week equivalent to €160 per month. Part-time employees will be eligible for one day's salary per week, equivalent to €100 per month. In the case of Gozo based enterprises and full-time self-employed, this will increase to two days' salary per week equivalent to €320 per month for full time employees, and €200 per month for part time employees. For those full-time and part-time self-employed who employ staff, this will increase to €480 and €300 respectively, and the employees will be entitled to 2 days salary calculated on €800 a month. For more detailed info click here.
• Enterprises, including the self-employed, have a two-month deferral on the payment of  Provisional Tax, VAT and National Insurance Contribution on salaries. This will apply for taxes owed until the end of April. Enterprises will still collect National Insurance on their employees' wages, but will keep these dues for the duration of the deferral. A drop of circa 25% or more in sales registered would need to be proved. More details on tax payments here.
• Any companies which make third country nationals redundant will not be eligible to apply for work permits for third country nationals in the future. Malta is no longer accepting new applications for work permits from third country nationals, except for highly skilled workers. More details here.
• Companies who invested in teleworking schemes will also be granted partial refunds on their investments.
• The government will also accelerate VAT refund payments to businesses.

Measures for Individuals

• Parents who both work in the private sector requiring one of the parents to stay at home to take care of school-aged children will receive a direct payment of €166.15 per week if working full time or €103.85 per week if working part-time, provided that they cannot carry out their functions through teleworking arrangements. The same supplement applies to persons with disability who work in the private sector and are duly registered with Jobsplus and to employees who had their employment terminated as of 9th March 2020, including those who were self-employed, as a result of the COVID-19 pandemic.
• A medical benefit is being offered to persons employed in the private sector, who, after 27th March 2020, due to the impact of COVID-19 are not going to work because they are ordered by the Superintendent of Public Health not to leave their home, are not able to work from home and are not being paid by their employer during their absence from work. More details can be found here and on the Social Security website.
• Jobsplus will assist Third Country Nationals living in Malta to find an alternative job.
• Those individuals living in a rental property, who previously did not qualify for a rent subsidy and are now unemployed will now benefit from the scheme. Those affected by Covid-19 can access a rent benefit that covers up to 80% of the rent. This measure also applies if only one dependent in the household ended up unemployed.

Other general economic measures

• Malta's Government will be subsidizing interest rates on working capital loans for 2 years and up to a maximum of 2.5%.
• A liquidity injection of up to €1.6 billion in the form of deferred tax payments and loan guarantees. What this essentially means is that payments of income tax, VAT and NI for March and April are delayed for both employers and self-employed, and can be paid at a later stage (up to €700million). Loan guarantees are a promise by the lending institution to cover for losses, in the case of a borrower defaulting on a loan and not being able to make payments. This allows struggling companies to buy what they otherwise couldn't afford. The Maltese government is offering up to €900 million in guarantees, expected to release up to an additional €4.5 billion in the market.
• Up to 3-month moratorium for personal and business loans, meaning delaying the payment of loans by up to 3 months.
• An extra budget of €35 million has been allocated to health authorities.

The European Union is also working on an incentive package that will counter the economic impact brought about by Covid-19, in a coordinated response.

The two main trade unions in Malta have deemed these measures as a step in the right  direction, yet criticism has also been drawn from the Malta Employers Association who said the package is insufficient to keep businesses afloat in a statement on Thursday.