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Malta Budget 2023 - An Overview

Updated: Feb 20, 2023



This budget plan includes strategies aimed at maintaining economic growth in the aftermath of the pandemic while facing a challenging international economic and political landscape. Additionally, it incorporates various initiatives focused on environmental protection and sustainability.


The core objectives and benefits stemming from the 2023 budget are as follows:

​The cost of living adjustment (COLA) will be €9.90, and pensioners will receive an additional €2.60.

​The threshold for non-taxable pension income will increase to €14,968.

​Beneficiaries of mental health care will have 2 years of Social Security Contributions credited to their accounts.

​A fund of €600 million has been allocated to counter rising energy and cereal prices

​The income tax on royalty income for authors will decrease from 15% to 7.5%.

​Tax refunds of between €60 and €140 will be reissued

​The 1.5% reduced stamp duty rate on transfers of shares in family businesses will be extended.

​A plan to improve the aviation industry will be put into action.

​The grant for purchasing new electric vehicles will be extended and could reach up to €12,000.

​The tax deduction for parents for their children's sports, arts, and cultural activities will increase to €300, and parents of children with disabilities will

​First-time buyers who qualify will receive a grant of €10,000.

​A one-stop shop for start-ups will be launched in 2023, with incentives for digitization projects.

Economic Performance


The government anticipates robust economic growth in 2021 to continue, projecting a GDP increase of 6.0% in 2022 and 3.5% in 2023 in real terms.


Despite this strong economic growth, the debt-to-GDP ratio is expected to increase from 57% of GDP in 2022 to 59.1% in 2023 due to expanded energy support measures.


The inflation rate for 2022 is expected to be 5.7%, which will then decrease to 3.7% in 2023 with contained energy price inflation. Unemployment is predicted to remain low in 2022, at 3.1%.


 

Income and Other Tax Measures


The primary changes to the income tax system include adjustments to the tax rates for pensioners to maintain the tax-free status of increased pensions. Additionally, there will be a decrease in the income tax rate for authors and a tax credit for parents of children with disabilities.


The tax deduction for parents whose children participate in extracurricular activities will also increase. There will be another round of tax refunds, ranging from €60 to €140, for eligible individuals.


The MicroInvest program will be extended to include social enterprises.


The reduced stamp duty rate for certain transfers of family businesses and the intra-group transfer of capital allowances for specific companies will be extended. Changes to various residency programs will also be proposed.


 

Social Initiatives


The budget includes several initiatives aimed at improving the quality of life and overall well-being of individuals with various social needs.


There will be a cost of living adjustment of €9.90 per week for 2023 and an additional €12.50 per week for pensioners.


Some measures aim to enhance pension benefits, while others focus on providing support to the elderly, vulnerable populations, and those suffering from health conditions, including mental health issues.


Other social initiatives include an expansion of paternity leave, assistance for those seeking to purchase property, investment in public entities such as the police and civil protection, increased social benefits, grants, allowances, and tax credits for parents of children with disabilities, and an increase in the children's allowance.


There will also be increased government investment in the healthcare sector.


 

Other Measures

The administration has a goal of reducing red tape and establishing a supportive environment for businesses. This will involve making room for business growth, supporting start-up enterprises with financial aid, and backing the major economic sectors that are or have the potential to be crucial to the economy.


 

Environmental and Sustainability Initiatives


The Government has put in place a series of incentives to encourage businesses to embrace digitalization, conserve energy and water, and minimize waste and surplus materials.


The incentives for purchasing electric vehicles and other clean transportation options, scrapping old vehicles, and installing photovoltaic panels in homes and renovating private sector buildings will be extended.


The government is also committed to environmental projects such as green urban regeneration and increased investment in green urban areas, treating greywater from businesses along the Maltese coastline, reducing waste and converting organic waste into energy and agricultural compost.



 

Read the full budget speech here:


Budget-2023-Speech
.pdf
Download PDF • 4.81MB

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