Yesterday evening, Finance Minister Edward Scicluna presented Government’s financial plans for 2018 in parliament. MaltaProfile prepared a brief overview of the key points.
Taxes and Social Measures
Malta’s Government decided not to introduce new taxes or other revenue-raising measures. In fact, workers who earn less than €60,000 will be receiving a one-time tax refund of between €40 and €68, depending on the income tax paid. Tax brackets will also remain unchanged.
The Government has committed itself to giving back leave to workers for public holidays falling on a weekend. While discussions are ongoing with social partners on this matter, the budget 2018 grants an additional day of leave to all workers, with the leave entitlement rising 24 to 25 days. The cost of living adjustment will be €1.75 per week. Pensioners will get an increase of €2 per week, while the first €13,200 will be tax free. The threshold for VAT exemptions will be raised from €14,000 to €20,000 for small undertakings.
Housing and Property
In an effort to regulate Malta’s rental market, a White Paper on rents will propose that all rental agreements must be registered. The tax scheme for First-Time Buyers originally introduced in 2014 will be extended for another year. Individuals, termed “Second-Time Buyers”, who sell their residential home, being their sole owned immovable property, and acquire another home will receive a refund of a maximum of €3,000 of the duty on documents paid on the acquisition of the second home. The idea is to enable families to either move to a bigger home should they have outgrown their first one, or alternatively move to a smaller place should they wish to downsize. Where the individual is a disabled person, the maximum refund is increased to €5,000. Government will also spend €50 million to provide 700 affordable housing units. Other measures focus on financial assistance for the rehabilitation of dilapidated buildings, as well as incentives to rent out property to the Housing Authority.
The Government pledges to reach an agreement with the Malta Union of Teachers on new working conditions. There will be more investment in the teaching of vocational subjects. Government will also be extending the one tablet per child initiative. People under 40 who continue their post-graduate studies (for instance, to obtain a master’s degree or higher) will not pay income tax until two years after they finish their course. The government will also be building four new schools in Marsascala, Qawra, Msida and Victoria.
Some €150 million will be invested in a waste to energy plant. The government will also continue to invest in reverse osmosis plants, and a new desalination plant will be built. Work on the building of a gas pipeline to link Malta with the European network will continue. Environmental and technical studies will be carried out in 2018. An organisation called Ambjent Malta will be set up to take care of the environment. The Government will hold discussions with the private sector to introduce a system for the return of plastic and glass bottles, with customers getting a refund.
The Government will be offering incentives for better use of bikes and electric bikes. VAT on the renting of bikes will be cut down from 18% to 7%. There will be better access for cyclists on urban roads from Valletta to St Julian's and from Mosta to the University. Other incentives will be offered for people buying electric cars, such as no road licence to be paid for the first five years. The government will be working to implement free transport for all students as from the next scholastic year. The Tal-Linja bus card will be free of charge for all students aged between 16 and 20. Some 160 residential roads will be rebuilt next year to kickstart Government’s seven-year programme to resurface all of Malta’s roads. A new agency will be set up to take care of the infrastructure, including the maintenance of existing roads.
Finance Minister Scicluna said Malta aims to take full advantage of opportunities arising from Brexit and a working group with the aim to develop a suitable strategy has already been set up. Government has also reinforced its commitment to making Malta a blockchain hub. In the coming months, the Government will be building a Blockchain lab within the Malta Information Technology Agency, as well as providing civil servants with training on the use of this technology. Malta’s Individual Investor Programme will be extended for the upcoming year.
Source: Press Release by Minister for Finance Edward Scicluna
Photos by Omar Camilleri