The budget speech for 2015 included some very interesting changes, many positive reduction in taxes and prices, but also some negative price and tax increases. Companies and people earning more than €19,500 per year will be especially happy.
The tax on income between €19,500 and €60,000 will be lowered from 29% to 25%. People earning less will get a one-off bonus of €35. Another decrease are the energy bills for businesses; they will receive a 25% reduction. This is a considerable amount considering that the commercial electricity tariff is a lot higher than the residential tariff.
On the other hand the excise duty on wines and cigarettes will be increased by 20 cent for wines and between 5 and 15 cent for cigarettes. Also swimming pool licence fees are increasing by 15%. Drivers will have to pay between 5 and 15 euros more road tax, but on the upside, prices for petrol and diesel will decrease slightly.
Another highlight is the new regulations for cruise ships. To encourage them to stay overnight in Malta, they will be permitted to run their onboard casinos. However, they first need approval and pay a licence fee. Cruise liners staying in Gozo will be exempt from having to pay fees.
In order to integrate more disabled people into a work environment the government will give employers a tax deduction on profits that are the equivalent of the disabled person’s wage, up to a maximum of €4,500. Employers will also be exempt from having to pay social security contributions for those employees.
A change regarding property sales is that the capital gains tax is being replaced by a 8% withholding tax. This tax is applicable for traders and non-traders. However, non-traders will have to pay 10% on property that was purchased before 2004 or 5% if the property was purchased less than five years ago.
The new budget has been well received by the public, as it also has some significant changes in how benefits are distributed and families are supported, as well as a balanced price increase on cigarettes and alcohol. Companies will surely be happy about the lower costs for energy, and top earners will be happy to have more money in their pocket. Overall, these changes make the islands more attractive as a location for businesses and for people to relocate to Malta for work purposes.
