Cut VAT to 15% to tackle inflation, SME chamber tells government

The Malta Chamber of Small and Medium Enterprises has demanded a reduction of the VAT rate from 18 to 15 per cent and the removal of duties on frequently used consumer goods.

Abigail Agius Mamo, the Chamber’s CEO, said on Thursday that these measures would ensure lower consumer prices across the board.

Her comments came on the day that a controversial price fixing deal between the government, major importers and retailers came into effect.

The SME chamber has criticised this agreement, calling it an “unwarranted intervention in the free market”.

A survey among the Chamber’s members shows that inflation is a top concern for SMEs, which expect the government to tackle the issue.

The quarterly survey also shows that 40% of businesses represented by the Chamber reported a drop in profits last year, while 30% reported their sales had remained unchanged.

A drop in customer spending power, increased competition, inflation, illicit trading, global uncertainty, but also construction work around businesses were named as the main reasons for a decrease in sales.

Almost three-quarters of businesses believed the country was moving in the wrong direction.