Finance Minister Edward Scicluna presented the 2021 Budget for Malta yesterday. The theme for this year’s Budget is “Strongly Moving Forward” – a theme apt at providing courage and further strength to the Maltese Islands in these times of uncertainty brought by the Covid-19 Pandemic.
Despite the fact that Covid-19 has adversely affected economies and governmental finances worldwide, this year’s budget comes with a stimulus package of €100 million aimed at economic recovery from the pandemic.
The salient features of the said Budget include, among others, the following:
Tax Schemes and Other Incentives
- For the 4th consecutive year, no new taxes have been implemented
- Wage supplements given to businesses adversely affected by the pandemic shall continue until at least March 2021
- Income tax refunds to increase
- Government voucher scheme to be re-introduced – to be used for services and restaurants and accommodation
- VAT exempt threshold for businesses to increase from €20,000 to €30,000
- Reduced rate of duty of 1.5% on transfers of family businesses to be extended for another year
Incentives for Workers
- Cost of Living Adjustment (“COLA”) increased to €1.75 weekly
- An extra day of leave to be provided to all workers to compensate for public holidays falling on weekends
- Tax-exempt threshold for private pensions to be increased to €3,000 from €2,000
Measures for Families and the Elderly
- Children’s allowance to be increased for all families
- Allowances and grants to be provided for foster carers and couples who adopt a child
- Pensioners to get the COLA described above and an additional €3.25 – €5 in total
- Government bonds with favourable interest rates for senior citizens
Property Incentives
- First-time buyers of properties are to be exempted from tax on the first €200,000 of the property price
- An extension of the reduced rate of stamp duty of 1.5% on property prices – provided that the Promise of Sale is entered into by end of March 2021 and the final deed is finalised by end of December 2021
- Reduced taxes on properties given by donation – the first €250,000 are to be tax-exempt
- Further tax benefits on inherited properties used for one’s own residence
Transport
- Car scrappage scheme extended with maximum grant to increase to €7,000
- Extending and improving incentives for alternative transport use
- Further studies on mass transportation and further roadworks to begin
Health
- More medicines to be added to state-provided medicines
- New centre for palliative cancer care to be opened
Further incentives and measures have been introduced apart from the most salient ones described above. To this end, we would suggest that you get in touch with us for further information and assistance on which incentives and measures directly affect you or your business by sending us an email on info@drwerner.com or by calling on +356 21377700.
