On 30th of October 2023, Hon. Clyde Caruana, the Minister for Finance and Employment presented The Malta Budget 2024. The key highlights of The Malta Budget are as follows:
Economic Highlights
- Annual inflation rate for 2023 is 5.7% but projected to decrease to 3.7% in 2024;
- Unemployment rate projected to remain 2.7% in 2024;
- COLA (Cost of Living Increase) is set to increase to €12.81 per week (€9.90 last year) for all employees, pensioners and people receiving social benefits;
- GDP (Gross Domestic Product) deficit of 4.5% predicted for 2024. This is a decrease from the 5% deficit predicted to be registered for 2023;
- Debt-to-GDP ratio is predicted to be 52.8% for 2023 with an increase to 55.3% in 2024;
Social Measures
- The National minimum wage is set to increase to €213.54 per week inclusive of COLA. This is an increase of €20.81;
- Pensions are set to increase by €15 per week (€780 per year) inclusive of COLA. This is an increase of €2.19 beyond COLA;
- An increase of 6.5% in pension for individuals who delay their retirement by one year. If retirement is delayed by four years, there will be an increase of 29%;
- Children’s Allowance set to be increased by €250 per eligible child per year;
- Social Housing Benefit set to increase by €4,200 for single individuals and by €6,000 for families with at least two children;
- Parents set to receive a bonus of €500 for each newborn child and €1,000 for their second child (previously €400);
- For those parents whose children continue full time education, a special allowance amounting to €500 per year over a three year period is given;
- In-work benefit set to increase by €50 for every child under 23 years of age;
- An extension in the In-Work benefit of €150 which is given to those individuals working atypical hours and whose pay does not exceed €20,000;
- An increase of €1,000 in the Carer at Home Allowance;
Business Measures
- Venture Capital Fund set to be established with the aim of aiding start-ups (mainly those who will be investing in technology and those with limited access to funds);
- Extension to the Seed Investment Scheme, the Startup Finance Scheme, the Skills Development Scheme and the Business Enhance Scheme;
- Reduction of Stamp Duty rate from 5% to 1.5% applicable on an inter vivos transfer of a family business to descendants;
- Regulation of outsourcing and temping agencies;
- Regulation of single work permits and new foreign works permits along with a new fee structure set to be applied;
- Finance Framework set to be developed for aircraft leasing;
- Less strict requirements for owners of small businesses to file audited accounts for tax purposes;
- Increased capping of tax credits for investments made into a Family business registered with the Family Business office;
- The MFSA set to implement regulatory changes related to Limited Partnerships, the setting up of new Family Offices in Malta and Notified Professional Investment Funds;
- Up to €500 in tax credit available to businesses that donate to voluntary organisations registered with the Commissioner for Voluntary Organisations that support social, environmental or animal welfare causes;
Property Measures
- First time buyers grant extended to €10,000 across a 10 year period;
- First time buyers will be entitled to a one-time grant of €15,000 for a property situated in Malta and €40,000 for a property situated in Gozo;
- Extension to reduced Stamp Duty rate for first and second time buyers. However, there will be no extension to the reduction of the 2% reduced stamp duty rate applicable to transfers of immovable property situated in Gozo;
- Extension to Capital Gains and Stamp Duty exemptions for restoration of vacant properties;
- Re-launching of schemes for facade restoration works for certain properties;
Tax Measures
- Income tax exemption on Pension Income set to increase from 40% to 60%;
- Coming into effect on 1st January 2024, Income tax exemption on Pension Income for any widow/er below the age of 61 who receives a pension;
- Extension to tax refund scheme in which workers are set to receive payments between €60 and €140 depending on their income;
- Tax credit for parents of children with disabilities who attend private therapy set to increase by €300 for a total of €500 (previously €200);
- Reduced tax rate of 7.5% for income derived by athletes, licensed coaches and other individuals engaged in sports activities set to be extended;
- Extension to Schemes relating to scrapple of older vehicles, grants for the conversion of petrol vehicles to LPG and grant schemes for the purchase of new electric vehicles, motorcycles and e-bikes;
- Extension to Registration Tax exemption for plug-in hybrid vehicles and exemption from annual road license fees for both electric and plug-in hybrid vehicles for a five year period from date of registration;
- Government set to continue to subsidise energy, fuel and grain prices;
- Regulatory framework of gaming industry set to be strengthened along with the implementation of the esports strategy;
- No plans to introduce any top up tax measures under the global minimum tax framework during 2024;
Sustainable Energy
- The number of Electric Vehicle charging systems are set to increase to 1,200 from the current 372 charging stations;
- The extension of schemes relating to the purchasing of solar panels, solar water heaters, heat pumps and other similar devices;
- Incentives set to be given for purchase of personal e-scooters;
- In relation to Project Green, approximately 80,000 sqm of land will be transformed into urban green spaces and over 5,000 are set to be planted;
