The Minister of Finance introduced the country’s Budget for the year 2022. It is highlighted that the Budget deficit of the country increased to €1.268 billion (that is 9.7% GDP) in 2020 and the deficit forecast for 2021 is of €1.545 billion (that is 11.4% of GDP).
Salient features of the measures announced include:
Tax
- Tax refunds between €60 to €140 shall be granted next year to all taxpayers earning less than €60,000.
- Part- timers that in employment, students or pensioners shall be taxed at the rate of 10% instead of 15%.
- Artists will pay tax at the rate of 7.5% and a number of incentives shall be introduced to assist those effected by the COVID 19 pandemic.
- The reduced rate of 1.5% stamp duty on inter vivos transfer of family business property and securities introduced last year shall be extended for another year.
- Number of grants, tax and duty exemptions shall be granted when purchasing an immovable property that has been built for over 20 years and has been vacant for at least 7 years, immovable property situated in an Urban Conservation Area and typical Maltese built immovable property. In such cases there shall be an exemption from tax and stamp duty on the €750,000 of the value of the immovable property; a grant of €15,000 given to first time buyers and €30,000 if immovable property is situated in Gozo; and a grant on VAT paid in the refurbishment of €54,000 on €300,000 of the costs incurred.
Social Measures
- Cost of living increase for 2022 shall amount to €1.75 per week
- Social security pensions shall increase by €5 per week
- Increase in bonus of €150 paid to pensioners over the age of 65 years who have not paid sufficient social security contributions
- Student stipends shall increase by 10%
- Free public transport for all Maltese nationals and residents as from the 1st October 2023
- Last year the government introduced a €300 grant for parents who have to stop working to care for a disabled child, this has been increased to €500
Other Measures
- Grant to acquire new electric or plug-in hybrid vehicles will increase by €3,000 to a maximum of €11,000. In the case the scrappage scheme is adopted then the grant is increased to €12,000
- Organic production of fruit and vegetables is being encouraged and a grant of a maximum of €8,000 will be granted if uncultivated agricultural land is converted to fruit trees orchards
- Schemes will be introduced to encourage domestic investment in photovoltaic panels, batteries which store solar energy, restoration of domestic wells, purchase of solar water heaters and reverse osmosis.
