Summary of 2022 Malta Budget

Introduction

Macroeconomic Indicators

• Employment rate: 77.3%1
• Unemployment rate: 3.2%2
• 2021 Malta deficit estimate of: 11.1% of GDP.
• Malta Public Debt to increase to 61.3% of GDP.
• 2022 deficit forecasted to decrease to 5.6%
• 2022 debt to increase to 61.8% of GDP.
• Deficit predicted to decrease to 2.9% of GDP by 2024.
• GDP ratio expected to reach 62.4% by 2024.
• Such predictions remain volatile in view of next year’s challenges, which include pandemic ripple effects, increase in energy costs and inflation. Deficit forecast may be revised by 1.4% to reduce impact on business & families.

Social

• Adjustment of tax deductions on pensions to €14,318 so that increases in pensions are not taxed.
• Increase in benefits for carers at home from €6000 to €7000 a year.
• Home Help of your Choice – Subsidy for this scheme will increase from € 5.50 to € 7 per hour.
• Part-time workers with more than one job may choose to increase National Insurance rate up to a maximum of 40 hours per week to have a better pension.
• A reduction in tax by half on the sale or purchase of property up to a value of €200,000 which has been rented out to a tenant for 10 years, if that tenant is eligible for rent benefits at an affordable rate issued by the Housing Authority. If the property is sold to the tenant, no tax is payable on the sale or purchase. The tax on the sale or purchase of property rented for less than 10 years will be reduced by half.

Work

• Investment towards green jobs and digitalisation.
• A National Employment Policy.
• Business to undergo a digitalisation audit following a skills census.
• A €2 million training scheme for employers to train its employees.
• Employees below a managerial position, whose basic salary does not exceed €20,000, will start to be taxed 15% on the first € 10,000 overtime income.
• Pensionable income for pensioners who remain in the labour force beyond retirement age will not be taxed.
• Tax reduction for part-time employees will go down from 15% to 10%. In-Work Benefit income limit for couples who are both working will rise from € 35,000 to € 50,000 per year.
• In-Work Benefit income limit for couples whereby one member is working, will rise from € 26,000 to € 35,000 per year.
• In-Work Benefit income limit for single parents, will rise from € 23,000 to € 35,000 per year.
• Employees seconded to the public sector by private contractors will be paid double for hours
• worked on Sundays.
• Free Childcare Services to be extended for employees whose working hours include evenings, weekends and on shift hours.
• Work-Life Balance and Parental Leave new legal obligations will be implemented as of next year.
• Government will continue working with social partners to strike the right balance in increasing the minimum wage.
• The cost of living adjustments (COLA) will be €1.75.

Ambition

• Modernisation of science labs in schools to invest in the education of STEM subjects.
• Students who work up to 25 hours per week will still be eligible for stipend.
• Increasing apprenticeship takeup with the private sector.
• More funding support to help commercialise technological products.
• Extension of rent subsidy to alleviate implications of added transport costs.
• Companies with unabsorbed capital allowances to benefit from tax reduction.
• Zero tax on reinvested profits.
• Incentives for businesses investing in innovation, digitalisation and sustainability.
• Tax pardons should not be expected, unless within strict legal terms under legal proviso 2, Legal Notice 361 of 2013 (SL 372.26).
• Starting June 2022, the interest rate due on income tax and VAT will be 7.2% per annum.
• €470 million investment on the modernisation of industrial zones, including Life Sciences Park, KBIC, ?al Far, Bulebel, Marsa, Kordin, San ?wann and ?al Luqa; and in new industrial zones.
• Assistance towards the infrastructural needs for aircraft maintenance companies as well as a new parking facility in Airport Zone Park 4 ?al Farru? for employees and clients.
• Continuation of works on tunnels in ?al Kirkop, the Airport Intersection Project (KTAIP) and the Imrie?el Bypass, including planting of trees and plants in the area.
• Investment in Maritime Infrastructure at Malta Freeport in line with its regeneration plan.
• Explore opportunities related to offshore renewable energy within the Exclusive Economic Zone.
• Implementation of the strategic plan for the financial services sector in Malta as proposed by the Malta Financial Services Advisory Council (MFSAC).
• Further investments in eID services.
• €500,000 for recognised certificates in emerging technologies for tertiary education.
• Investment in an incubator and incentives for digital & video games and esports.
• Seed Fund for researchers and entrepreneurs to develop new sustainable ideas.
• Start-Up Residence Permit to attract start-ups and entrepreneurs.
• Reference point for entrepreneurs including a start-up visa.
• Development of a programme for specialised TCNs.
• Extension of MDB SME loan to include green sustainable projects with loans up to €5 million at favourable interest rate.
• Setting up of the “Blue Med Hub” to attract local and foreign startups and SMEs in the sector.
• Extension on the reduction of stamp duty from 5% to 1.5% on the transfer of family business inter vivos.
• Finalisation and introduction of the Social Enterprise Act.
• Negotiations to introduce new airline routes to increase Malta’s connectivity.
• Modernisation of heliport facilities in Xewkija, Gozo.
• New Agency for the Regeneration of Tourism Zones starting with the North of Malta.
• Continued implementation of the Malta Film Studios Masterplan including the building of the first soundstage.

Liveable Malta

Building & Construction

• Introduction of contractors license certifying the quality linked to incentives.
• Tax relief on the sale and purchase of vacant property which is within the Urban Conservation Area
• or has heritage value. Capital Gains tax and stamp duty will be alleviated for the first €750,000 of the property price. First time buyers of these properties will receive a grant of €15,000.
• Incentives will be offered to those who build new buildings in sync with traditional Maltese
• architectural styles.
• The Planning Authority will introduce an aesthetic policy encouraging more development
• uniformity.
• Those buying property in Gozo will receive extra incentives over and above those aforementioned up to a value of €30,000.
• For first and second-time buyers in Gozo, the tax reduction schemes on stamp duty will be
• extended for another year.
• Investment in the Building Construction Agency will be increased to further support the Office for Regulation of Buildings, the Board of Builders and the Building Regulation Board.

Sustainability

• A Monitoring Board will be set up to regulate the implementation of the Low Carbon Development
• Strategy.
• Government will set up a fund to invest in new public open spaces and green infrastructure.
• A Green Fund will be launched to help Maltese companies invest in environmentally sustainable projects.
• Carbon credits will be made available to reward green investments, allowing people to sell their carbon credits on the market.

Energy

• Government will continue to implement schemes and measures leading to more efficient energy production and use, including renewable energy such as panels, solar water heaters and heatpumps.
• Tenders will be published in connection with the shore-to-ship project at Malta Freeport to promote cleaner air.
• The Energy and Water Agency will launch two projects to exhibit the application of renewable energy batteries.
• A fund will be launched to further equip government buildings with solar panels, ensuring that government buildings are increasingly and predominantly powered by renewable energy.

Modern Malta

Transport

• Free Public Transport will be offered for all; studies for a metro will be pursued.
• Government will continue its work to increase the number of docks. Piers in Sliema and Cospicua will be built. A promenade between Vittoriosa and Kalkara will be created. Investment on a Bugibba breakwater.
• Increase the financial grant to incentivize the purchase of less polluting vehicles. From € 8,000 the incentive will rise to € 11,000 and will go up to € 12,000 when the vehicle scrapping scheme will be used. For Gozitans, the financing of the scrapping vehicle scheme will increase by € 1,000 to € 2,000.
• Other schemes in favour of less polluting vehicles will be extended for another year, including incentivizing purchase of electric vehicles.
• Schemes which amount to a full VAT refund on bicycles, electronic and not, will be extended. The same applies to the scheme to incentivise the purchase of motorcycles, scooters, pedelecs and bicycles assisted by an electric motor.
• A new scheme will be launched for minibuses, coaches and trucks which install photovoltaic panels, through a grant financing a maximum of € 900.
• A scheme will be launched to attract minibus operators, coaches and trucks to reduce smoke emissions through the installation of filters such as the Diesel Particulate Filter (DPF) and Selective Catalytic Reduction (SCR).
• Malta Enterprise will launch a scheme to support businesses to replace fossil fuel vehicles with electric vehicles.
• Government will install 1,200 charging points for electric vehicles over the next 3 years.
• Government will update the Vehicle Registration System and Vessel Tracking System and will invest in a more modern register of ships.

Waste

• Government will continue to work on the EcoHive project and Waste to Energy plant.
• Smart Bins will be introduced in partnership with Local Councils.
• Bulky Waste Centers will be introduced, and “Reuse Centers” will be established to allow the reuse of items such as toys, ceramics, books and furniture.
• Government will seek to set up a “Repair Center” whereby certain equipment can be repaired instead of recycled.

Energy

• Government will invest in shore-to-ship energy infrastructure.
• Studies will be conducted to identify the best route for a second interconnector cable.
• Technical and financial feasibility studies will be carried out for a pipeline which can carry hydrogen.
• A strong investment plan for the energy distribution network will be accelerated by Enemalta.
• Investment will be carried out in the various voltage levels and the direction is to move towards increased grid automation.
• Government will announce an updated billing system by ARMS along with a change of laws to enable this new system to be introduced. With this new system, consumers will save the cheaper units they do not use for periods of higher consumption.

Health

Medical Infrastructure

• Invest in medical infrastructure for Accident & Emergency and Medical Imaging Departments, a third Cardiac Catherisation Suite, and in MR Linac for better and faster cancer treatment.
• Build an acute psychiatric hospital and rent a facility for such care until the new hospital is built.
• Sustain and extend Remote Patient Monitoring pilot project monitoring sugar levels in children under 16 (type 1 diabetes), to start including 17 to 21 year olds.

Sports

• Investment in an olympic sized pool in Bormla; upgrade of waterpolo pitches in Marsaskala, Valletta and Marsaxlokk; new football ground for Imsida St. Joseph; and a national rowing tank.
• Outdoor Velodrome to be incorporated in the ongoing Ta’ Qali project.
• Pursue the development of the aquatic and sports centre including: an olympic sized pool and a sports pavilion in Rabat Gozo.
• Malta will host the Small Nation Games in 2023.
• A plan will be launched for a motorsport facility worth €20 million in collaboration with Malta Motorsport Collaboration.
• Extend Marsa Sports Complex facilities to include gymnastics training.

Culture & Art

• Tax rate of 7.5% for artists applicable for base year 2022.
• Artists income tax will be calculated over a 3-year mechanism.
• €1 million allocation to create a guarantee scheme for artistic activities by producers and promoters to recover non-refundable expenses due to new restrictions.
• Enhance the scheme for unsold seats as a result of new restrictions for events with a €2 million allocation.
• A scheme for projects managed by the Malta Arts Council with a €2 million allocation.

Justice

• Continuation of FATF implementation plan serving as guidance to Maltese authorities to meet country obligatory requirements.
• Strengthening Attorney General Office by attributing further powers to assume prosecution
• functions, allowing Malta Police Force to dedicate greater focus on investigations.

Equality

• Equality certification for business.
• Expansion of ‘Jien Nappartjeni’ programme.
• Implementation strategy to address racism with stakeholders and media.

Foreign Affairs

• As of June 2022, Malta will intensify its preparations to get a non-permanent seat on the United Nations Security Council.
• Efforts towards a diplomatic presence in Brazil and Ethiopia.