The government was committed to continue reducing bureaucratic measures which were proving burdensome for Maltese businessmen, parliamentary secretary Edwin Vassallo told The Malta Independent yesterday.

Mr Vassallo was giving his reactions to the recent survey on the performance of small and medium enterprises in 2006 and their outlook for 2007, conducted by the Chamber of Small and Medium-sized Enterprises (GRTU).

The study showed that 84 per cent of businesses questioned had a positive outlook for the current year after registering a successful 2006 for their business. The study was carried out among a sample of 350 businesses chosen randomly from Malta and Gozo.

Nearly 40 per cent said they made between 10 and 30 per cent more than they had made in 2005, while nearly 30 per cent said they made a loss of between 10 and 30 per cent more than in 2005. 31.4 per cent said they neither made more profit nor more losses.

Replying to a question on what they believed could help their businesses grow, the respondents gave several replies, among them less taxes and regulations, less bureaucracy which was hindering their business and a more positive general environment.

On this, Mr Vassallo said that during a recent meeting of the Cabinet sub-committee on competitiveness, the issue of red tape and bureaucracy was raised and discussed and a decision was taken to evaluate and try to quantify the cost of government-induced costs on local businesses and the effect this was having on their competitiveness.

He pointed out that the results on the effect of bureaucracy and the reasons why they were not doing well were conflicting. “Replying to a question on why they did not fare well, some said that it was because of heavy bureaucracy while others said that it was because more people set up a business. The latter took place because the government introduced measures to simplify the process to attain a trading licence. So we did reduce red tape,” he said.

Commenting on the overall performance results for 2006, Mr Vassallo said they were “no surprise” because such results were expected with a marked improvement in the economy.

The Malta Independent pointed out that a number of businesses expressed their concern over illicit trading. Mr Vassallo replied that there was a difference between actual illicit trading and perceived illicit trading.

“Let me explain. When we liberalised the market, making it easier for someone to import products from other European Union member states, some importers who started to see their products being imported by others, described this as illicit trading. In fact, illicit trading is when someone does not declare Value Added Tax or does not pay the eco-contribution. But yes, we are committed to continue curbing illicit trading. Parallel trading is not illicit trading,” he said.

He said that what impressed him most about the survey was the effect of negativity on businesses. “Whoever tries to create this false negative environment should be held responsible for the effect this is having on business.”