Although economic activity is slowly recovering, many enterprises are experiencing cash flow problems as a result of the Covid-19 pandemic PN MP Claudio Grech said during a press conference on Wednesday. 

Referring to the proposal announced by PN Leader Bernard Grech on Sunday, for all unpaid taxes and social security contributions which business have accumulated during the pandemic to be allowed to be paid over 8 years, Grech said that it is a proposal based on discussions done with enterprises and those who are self-employed. 

He added that the problems businesses are facing because of their lack of cashflow is hindering their competitivity. 

Grech said that the PN had supported the government in its decision to allow business not to pay their taxes for the year of 2020 and 2021 but noted that now businesses are being requested to pay what they are due by next May. 

“The government is asking these enterprises to pay these sums in May, while we are saying they can be paid over the course of eight years” said Grech. 

Grech explained how this measure has been worked out in a way not to cause any financial losses to the government. He said that business need to keep investing and that for the private sector to generate economic activity it needs to be confident that it can keep investing. 

“The fiscal policy that the PN is pushing is based on incentive. We believe that this proposal, which is just right in time, helps the private sector. Whilst giving the certainty that such taxes need to be repaid, this proposal makes sure that it does not continue to affect such businesses” he said. 

PN candidate Jerome Caruana Cilia, present for the conference, said that this proposal is just one of the many proposals made to help small and medium sized enterprises. 

He elaborated on how 95% of the country’s economy is based on SMEs. 

Quoting a survey done by the Chamber of SMEs, Caruana Cilia said that there were three main concerns which were highlighted. 

The first one showed how 20% of all respondents had a decrease in sales level because of the pandemic, the second most popular amongst participants with 16% said that they had problems with cash flow while another 15% were asking what was going to happen because of the pandemic.

Caruana Cilia expanded how certain revenue generated by business, cannot be physically accessed immediately by the owners and because of the pandemic it has created a problem. 

“Due to the impact of the pandemic some businesses do not have cash in hand to pay for expenses, VAT and stamp duty, not because they have bad intentions but because they do not have another option” he said. 

He concluded by saying that the proposal’s aim is to give a breath of fresh air to businesses to incentivize the economy.