The Minister of Finance introduced the country’s Budget for the year 2021 and highlighted that COVID 19 has brought about an economic impact on the country resulting in the GDP for 2020 being reduced to 7.7% and a fiscal deficit of 9.4%.
Salient measures that were announced include:
Tax
- First time buyers of immovable property shall be exempt from stamp duty on the first €200,000 of the purchase price
- Stamp duty reduced to 2% on the purchase of a second immovable property situated in Gozo and 2.5% in Urban Conservative Areas
- Stamp duty at 3.5% on first €200,000 on purchasing or inheriting one’s residential home
- Donations from parents to their children of the immovable property being the residential home of the children shall be exempt from stamp duty on the first €250,000 of the value of the immovable property whilst the balance will be subject to the rate of 3.5%
- Introduction of 15% income tax on royalty income derived from the publication of literary works
- VAT exemption threshold on annual turnover has increased to €30,000 (previously €20,000)
- Exempt pension income increased to €14,058
- Voluntary Organisations will be exempt from tax in 2021 if their annual turnover does not exceed €50,000
Social Measures
- Cost of living increase for 2021 shall amount to €1.75 per week
- Social security pensions shall increase by €3.25 per week
- Free public transport for persons age 70 and over
- Children Allowance increased to €70 per child for families earning €25,318 annually and €50 per child for those earning more
- Foster care allowance increase to €5,720 per annum
- The introduction of a €1,000 grant to couples adopting locally
- Carers Allowance increased to €6,000
- Extra day of vacation leave
- Introduction
of €300 grant for parents who have to stop working to care for a disabled child
Other Measures
- €100 government vouchers to be issued from which €60 is to be used for accommodation, hotels and restaurants and €40 at other retail shops
- Importation of single-use plastics shall cease as from next year, retail sales to end in 2022
- €20 million in funding to ensure state schools adhere to COVID-19 protocols
- The introduction of grants equivalent to the tax paid on the sale of products by fishermen and farmers at the fish and vegetable markets
- A grant of €10,000 upon the registration of new wheelchair accessible taxis
