Malta Budget 2024

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;