Malta: Malta Budget 2019 - An Overview

Last Updated: 25 October 2018
Article by Finance Malta

The Malta Budget 2019 was presented to the House of Representatives by Finance Minister, Edward Scicluna, on Monday, 22 October. Below are overviews of the budget by financial services firms in Malta, with downloadable reports found within each link. You can download the full Malta Budget 2019 report here.

Overview of #maltabudget2019

The Economy

  • No new taxes, tariffs or duties
  • Another budget surplus projected for 2019 (1.3%), even with IIP revenue factored out (0.5%)
  • Tax will make up the biggest chunk of revenue, with income tax revenue expected to go up 11.1%
  • A cost-of-living wage raise of €2.33 per week, with a pro rata addition for student stipends
  • New savings bond for elderly investors, following success of last year's
  • VAT on ebooks and musical instruments to decrease to 5 per cent
  • A new entity – TechMT- will focus on marketing Malta as a hub for digital economy and disruptive technologies such as blockchain
  • Emphasis on attracting eSports companies and events to Malta
  • Entity to be created and tasked with monitoring government concessions – past and present – and seeing whether they adhered to conditions stipulated
  • NGOs with income below €10,000 to be exempt of all taxes

The Elderly

  • Pensions to increase by €2.17 per week, over-and-above COLA
  • The first €13,400 in pension income will remain tax-free
  • Service pensions will increase by €200, and the method in which they are calculated will also change, leading to an increase of up to €11 per week for some
  • Public sector workers can now postpone retirement and benefit from an increased pension once they decide to hang up their boots. This brings them in line with private sector workers, who have been able to do so since Budget 2016
  • No more means testing for carers below the pensionable age who live with and care for an elderly person
  • People caring for somebody over 85 will be eligible for a carer's allowance, with no medical assessment needed
  • Tax exemptions for third pillar pensions to rise to €2,000

Environment & Infrastructure

  • Free public transport extended to 14- and 15-year-olds and all full-time students aged 20 and over. There are also plans to give people living with a disability free bus trips.
  • 100m allocated for road reconstruction
  • Public-private partnerships to turn private lots into public car parks are in the pipeline
  • All vehicle-related exemptions related to electric vehicles, conversion to running on gas, scrappage schemes and motorcycles are being extended
  • Vehicle VAT refunds to be concluded with final tranche of payments for cars registered in 2008
  • VAT refund of up to €70 for people installing a domestic reverse osmosis system
  • Urban gardens project to convert public spaces into green areas
  • A 'safe city' project involving AI-driven CCTV cameras will be introduced in crime hot spots in Paceville, with Marsa next in line

Property & Rent

  • Means testing to be scrapped for rental subsidies - with some caveats Single people who pay rent will be eligible for up to €3,000 per year in subsidies, up from €1,600. Couples with children will be eligible for up to €5,000. Only renters who pay a maximum of 15 per cent in income tax will be eligible
  • Incentives for landlords willing to rent properties for longer periods at below market rates
  • Equity sharing property schemes, allowing over 40s to buy property as joint partners with the government
  • Social housing bolstered, with the conversion of dilapidated properties into social housing
  • All previous property incentive schemes related to first- and second-time buyers, properties in Urban Conservation Areas, property restoration and buying property in Gozo to be rolled over for a further year

Gozo

  • Private sector workers who commute from Gozo will be eligible for a partial refund of their Gozo Channel ferry ticket
  • Increased allowance for carers accompanying elderly to Malta for medical treatment
  • Public sector workers who use collective transport when coming to Malta from Gozo to get €1.50 daily allowance
  • Gozitan students to be offered affordable housing in Malta

Work

  • Extra day of leave for workers
  • Minimum wage workers to get €3 a week over-and-above COLA, provided they have been on minimum wage for at least one year
  • Income tax refund of €40-€68 per worker
  • Self-employed forced to shut up shop will be eligible for unemployment benefit until they find work
  • Public sector workers to have the chance to work past their pensionable age, in line with private sector provisions

Family & Education

  • Children's allowance to increase to up to €96 per year for households with less than €20,000 in annual income
  • Tax rebates for parents with children in private schools to increase by €300 per child.
  • Rebates for wedding expenses to increase by €250, to reach €2,000
  • All Matsec exam fees to be scrapped
  • Secondary students to get free entry to all Heritage Malta sites, with free entry for two accompanying adults

Disability

  • People whose disability precludes them from working will receive an additional €10 a week, with benefit rising to €150 per week. This measure will also apply to people with severe intellectual disabilities, rather than just physical ones
  • Plans to introduce free public transport for people with a disability
  • Children with a disability will be eligible to receive €25 per week
  • Police, army and civil protection department officials who are permanently disabled or even killed while in the line of duty will find it easier to get compensation, with a specialised mechanism introduced.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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