Yesterday evening, the 9^th October 2017, Malta Finance Minister Hon Profs Scicluna laid out the plans of the Government for 2018 in the first budget in decades that was put in a context of a surplus for Malta, continual economic growth (currently around 5-6% annually) and record numbers for tourism and employment. Therefore, as the Minister proudly announced, this Budget did not include the addition of any new direct or indirect taxes, and several measures, as shown hereunder, in order to continue building on the positive context of the island as well as to seek improvement in key areas such as traffic control and roads, as well as property and rent.

EMPLOYMENT

·         Every employee shall get a wages’ raise of Euro 1.75 weekly in line with the increase of cost of living adjustment; 

·         Every employee shall be entitled to an additional one day of vacation leave from 2018; 

·         The minimum wage has been historically increased by Euro 3 weekly after a year of employment; 

·         In addition, each employee earning less than Euro 60,000 a year shall be entitled to a one-off government payment varying from Euro 40 to Euro 68;

·         Pensioners will get a raise of Euro 2 a week, while the government bonds with beneficial rates specifically for pensioners shall continue to be available.

VAT

·         The threshold for non-chargeable VAT shall be raised to Euro 20,000 in order to incentivise small or mid-sized self-employment and entities further;

·         VAT Grouping for the financial and gaming sectors shall be introduced in order to exclude intra-company services and provisions from the VAT cap.

PROPERTY

·         There shall be the laying out of a White Paper proposing a rent reform.  This shall entail the proposal for the obligatory registration of all rental agreements, with a reasonable minimum duration of the rent period. Additionally, laws relating to eviction procedures shall be reviewed so that the time period for such actions becomes shorter and the eviction takes place within a reasonable timeframe.

·          The scheme for First Time Buyers shall continue in 2018 and therefore, individuals buying their first property shall not pay stamp duty on the first Euro 150,000;

·         A new scheme for people who are selling their first property and buying a second property, therefore, continuing to own just one property, shall be entitled to a refund for stamp duty of up to Euro 3,000, which goes up to Euro 5,000 in the case of a person with disability;

·         The Scheme for restoration of property within specific areas of Malta shall continue to remain active in 2018. Other schemes such as the decrease in stamp duty to 2% for property purchased in Gozo as well as the decrease in stamp duty to 3.5% for purchase of property in Urban Conservation Areas shall also remain.

INVESTMENT

• The schemes of Malta Enterprise regarding businesses such as MicroInvest or Business Start shall continue to be improved with additional monetary assistance up to Euro 70,000 depending on the circumstances of the business in question;
• The Individual Investment Programme shall remain in force next year.

TRANSPORT AND ROADS

·         There shall be the creation of an Agency entrusted with the improvement of all roads in Malta over a period of seven years with an investment of over 700 million Euro;

·         Youngsters between the ages of 16 and 20 shall receive a free card to use public transport during the next year;

·         School children shall be provided with free transport to and from school (both for government and independent or church schools) from the next scholastic year;

·         Full refund of VAT on bicycles and electric bikes shall continue to be given, as well as the extension of refund up to Euro 400 on the purchase of motorcycles, scooters or electric bikes;

·         There shall be an exemption from car registration tax for five years from registration for electric cars and hybrid cars.

ENVIRONMENT

·         There shall be the collection of organic material as an extension to glass and other waste;

·         The implementation of the gas pipeline between Malta and Italy shall continue to be performed, while a new electric distribution centre shall be built in Ricasoli.

SOCIAL

·         Aid of up to Euro 10,000 shall be given to parents seeking the adoption of children abroad;

·         Further buildings are added for social housing, including the rent of private property to the government for such purpose, and rent subsidies provided by the Government shall remain;

·         Social security forms and VAT returns can now be submitted electronically by companies.

EDUCATION

·         SEC and MATSEC examinations’ fees shall be halved next year and shall be fully abolished in the following year;

·         Individuals doing a Masters or a PHD shall be exempted from income tax for a maximum of two years after the completion of the course, as long as the individuals in question remain working in Malta for at least three years.

In conclusion, Malta’s beneficial working sectors such as the financial sectors, pharmaceutical sector, gaming and construction remain very strong and the Government continues to seek incentives in order to fortify the pillars of the country as an economic force.  The Maltese government is also seeking to reform in a more liberal way, controversial social issues such as recreational drugs, prostitution, access to reproductive health and quotas and the impact of such studies remain to be seen.