Malta Budget 2024

COLA

• Cost of living adjustment is going to be €12.80 per week

Increase to pensioners

• Pensioners are expected to receive an increase of €15 per week, inclusive of the €12.80 COLA adjustment. Additionally, pensioners who started receiving a pension from 2009 will receive an additional top-up, up to a maximum of a €1 per week.

Exemption from tax of Pensionable income

• Persons aged 61 and over will be exempt from tax on income.
• Starting next year, retired individuals born before 1962 will enjoy the same pension system as those born on or after 1962.

Widowers Pension

• As from next year the widower’s pension for persons aged 61 or less will be exempt from tax. Additionally, these pensioners will receive additional funds, as the government implements a commitment to grant them the entitlement equivalent to what their deceased spouse would have received.

Service pensions

• Service pension will increase by a further €200.
• The Service Pension for disciplinary bodies that opt to retire from service after 29 years will see an increase in their pension equivalent to 23%. Furthermore, a new measure has been introduced for service pensioners who have not reached retirement age and are not working or receiving a social security pension. Currently these individuals do not benefit from the cost of living adjustments (COLA). Starting this year, these individuals will receive an additional bonus for the Cost of Living, equivalent to the full COLA increase.

Increase in pension for persons who opt to continue working at pension age

• As from 2024, persons opting to work beyond the pension age of 61 will see their pension increase by 6.5% pension (currently 5%). For a two-year delay, the increase will be 13.5% (3% higher than the current rate). A three-year delay will result in a 21% boost and a four-year delay will lead to a 29% increase (6% higher than the current rate).

Increase in bonus for those who are not eligible for pension

• Individuals who do not qualify for a pension due to insufficient social security contributions paid will receive an additional bonus of €50, bringing the bonus to €500 for individuals with contributions of one to four years. For those who contributed for five to nine years, the annual bonus will increase from €550 to €600.
• Additional COLA mechanism – Those who are receiving social benefits and earn less than the Median Equivalised Income would be receiving additional compensation from the Government. This benefit will vary between €100 and €1,500; rates vary depending on the number of people and the income of the family.

Increase in children’s allowance

• Children’s allowance will increase by €250 per child.

Special allowance for those who continue with their studies after the mandatory age

• Children's Allowance is granted to parents until their children reach the age of 16, except in special cases of families with low income, where a special allowance is provided until the children reach the age of 18. Parents will also become eligible for the Special Allowance when their children continue full-time education. This Special Allowance will amount to €500 per year for three years, as long as the children live with their parents and remain full-time students.

Birth of a child

• Increase in the birth and adoption bonus from €400 to €500 per child.

Eligibility Extension for Parental SSC Credits

• Currently, parents who start working after having interrupted their careers to build a family benefit from credits in Social Security contributions for each of the first three children they raise.
• From 2024, this benefit will be extended to parents who first build a family and then enter the workforce, making them eligible for these parental credits that were previously not applicable to them.

Increase in grant for the elderly

• Elderly persons who are still living in their own homes or in certain elderly care facilities where they cover their full cost, will receive an additional €50 over their current €400 grant if aged 80 years and over. Those who are 75 but not yet 80 will continue to receive €300 per year.

Carer at home

• Starting from January 2024, the Carer at Home scheme will be increased by an additional €1,000, bringing the total to €8,000 per year.

Allowances for carers

• Carer allowance will increase with the full COLA that is of €12.81 per week.

Grant for parents who has a child with severe disability

• As from 2024, parents who are not employed to take care of their severely disabled children started receiving benefits equivalent to half of the Net Minimum Wage.  The said grant will increase by an additional €487 due to the recent increase announced to the minimum wage. The total annual grant will be in the region of €5,000.

Increase in tax credit for children’s therapy with disabilities

• The increase in the tax credit for therapy expenses will rise from €200 to €500 annually for each child with a disability.

Reduction in tax on donations made to voluntary organisations

• Entities that donate to voluntary organizations registered with the Commissioner for Volunteering and operate directly in the fields of social, environmental, or animal welfare will be eligible for a tax credit on donations, up to a maximum of €500.

Changes in the Rent Benefit Scheme

• The maximum allowance under this scheme will increase from €3,600 to €4,200 for an individual, from €4,800 to €5,400 for a family with one child, and from €5,000 to €6,000 for a family with two or more children.
• Furthermore, the minimum benefit that can be granted to beneficiaries of the scheme will also be raised to no less than €125 per month.

Tax Relief for Social Tenants and Property Sales for Residents

• The tax on social rents and the tax on the sale of social housing up to the first €200,000 of the property price will be waived to promote the stability of tenants who can continue to progress in the same community, and to encourage more homeowners to offer residential properties for social housing purposes.

Property in Gozo

• Gozo will still be eligible for special incentives. Where there is a purchase of UCA properties or properties that have been vacant for first-time buyers, from next year, the grant to first-time buyers of these properties in Gozo will increase from €30,000 to €40,000.

Income Tax

• Low income earners will be receiving another tax refund in the range of €60 to €140 in 2024
• All pension income will be exempt from tax
• A new €50 in-work benefit will be introduced, per child under the age of 23
• €150 in-work benefit grant introduced in 2022 for those working irregular hours and earning less than €20,000 will be payable in December 2023
• Minimum wage is expected to increase between €12 to €18 per week by 2027. As from January 2024, the minimum wage will increase from €192.73 per week to €213.54 per week
• The Highly Qualified Persons Rules will be revised to be consolidated under one system with uniform conditions
• Students in Year 7 will continue to receive a new laptop as part of the Government’s e-tablet-per-child policy
• Continued restoration and modernisation on Primary Schools, particularly St George’s Primary School Qormi
• Student stipends will also increase by €64 in proportion to COLA increase.
• Scholarship and tax credit programs for students who wish to advance their studies to a Masters and Doctorate level will be improved, even through the use of the European Social Fund

Capital Projects in the Healthcare Sector

• Censu Moran Regional Centre in Rahal Gdid
• Construction of new Blood Bank
• Continued modernisation of Mater Dei Hospital and Mount Carmel Hospital wards
• Investment in the infrastructure of the Department of Accident and Emergency, the Department of Medical Imaging and the third Cardiac Catherisation Suite
• Opening of new Health Care Centre in Rabat Gozo
• Continued modernisation of the Mosta, Floriana and Bormla Health Care centres
• An investment of €75m to take over the operation of the Gozo Hospital and Karin Grech Hospital

Free Medicine and Free Treatment

In 2024, the Government will be introducing additional free medication:

• Free medication to IVF patients
• Free medication to those who suffer from asthma
• Free medication to those who suffer from Pulmonary Fibrosis;
• Free medication to those facing mental health issues.
• With the help of the Remote Patient Monitoring Project, patients with high sugar level will continue to be monitored.
• The service provided by the Navigator Nurse will also be extended so that as from the day of diagnosis, patients diagnosed with cancer and their family would be assisted as required

Introduction of Police Patrol and Community Support Officers (PCSO) for visible patrols and community engagement and creating a specialised Roads Policing Unit to enhance road safety and accelerate post-incident clearing of roads.

The Victim Support Agency’s national support line 116006, introduced primarily for victims of crime, is being extended to operate 24 hours a day, providing round-the-clock support.

Sustained fight against the social scourge of domestic violence through the use of technology in the form of panic alarms. These technological devices, worn by individuals, immediately connect to the Police Force's central emergency system when activated, allowing for instant information and prompt action.

Foreign workers: Malta recognizes the need for foreign workers in certain sectors but aims to improve systems to ensure their deployment is strictly necessary, prevent exploitation, and safeguard the interests of the community.

Regularisation and transparency of outsourcing and temping agencies: Introduction of licensing requirements for introducing foreign workers to Malta and regulations to ensure equal pay for equal work, while promoting transparency, accountability, and the understanding of pay brackets for all workers.

Reduction of bureaucracy

• Establishment of a Central Data Repository to facilitate applicant identification for businesses operating in Malta.

New MBR portal

• The Malta Business Registrar will shift its current portal to a newly implemented portal which will facilitate the process for companies, partnerships and overseas companies to register and submit online documents.

Removal of audit requirement for small businesses

• To submit audited financial statements for tax purposes where this is not required by the Companies Act or Merchant Shipping Act, whilst ensuring that the integrity of financial statements is not compromised.

Start-ups

• Venture Capital Fund to assist start-ups looking to invest in new technological and innovative products.
• Seed Investment Scheme will be re-introduced providing tax credits granted to companies which invest in start-ups, following a due-diligence process.
• The ‘iStartup Finance’ scheme will be extended by Malta Enterprise.

Assisting Enterprises

• Continuation of ‘iSkills Development Scheme’, ‘Rent Subsidy Scheme’, ‘Innovate’ scheme, the ‘Smart & Sustainable’ Scheme and the ‘Investment Aid for Energy Efficiency Projects’ Scheme.
• Extension of support to small and medium enterprises for consultancy services to improve operations through investment in more sustainable measures.
• Establishment of Competence Centre in the Semi-Conductors Sector focusing on improving the skills of future workers as well as attracting foreign direct.
• a new complex in Hal Far to allow for small and medium enterprises operating in the manufacturing industry to conduct their business distant from residential areas.
• additional facilities for aircraft parking.

International Taxation

• In line with the options allowed under the European Union Directive implementing the global minimum tax regulations, Malta will not be introducing any of the components of the Pillar 2 rules in 2024 and therefore Malta will not be imposing a top-up tax that would bring the minimum tax rate to 15% as envisaged by the measures contemplated in Pillar 2. In light of this, the current tax system is not expected to change in 2024 and the current full imputation system is expected to remain in place.
• Measures in the forms of grants and tax credits will continue to be enhanced and made in conformity with EU and OECD regulations.

Family Businesses

• The reduction in stamp duty from 5% to 1.5%, when family businesses are transferred inter vivos to the younger generation will be once again extended during 2024.
• Family businesses registered with the Family Business Office in Malta will be eligible to benefit from higher capping on tax credits granted when investing in the family business.
• The government will also continue building on the framework created by the Business Families Act through measures that ensure that family business are free to restructure their operations in a manner that best suits their specific realities whilst not being deterred by cumbersome regulations or taxation issues.

Financial services

• Wealth & asset management: introduction of notified professional investor fund and limited partnerships intended to enhance Malta’s standing for international investors and family offices.

Sustainable Finance and REITs

• Consultations will be launched regarding proposed tax measures designed to incentivize companies and investors to make sustainable investments.

European Funds for Businesses

• Small and Medium Enterprises will be able to benefit from further cash grant opportunities under the Business Enhance Scheme.
• The Invest EU Financial Instrument will extend assistance to small and medium sized Maltese businesses by facilitating access to financing from local banks in the form of reduced interest rates and collateral requirements.
• The government will be also incentivizing the private sector in the field of digitalization through incentives for self-employed individuals and small businesses under the Business Enhance program.

Maritime Infrastructure

• In the maritime industry, Malta has solidified its place as the world’s sixth largest vessel registry. Changes to the Merchant Shipping Act are planned for the upcoming year, along with the introduction of a new policy for superyachts.
• Work has also started on the major project to build a facility cargo in the part of Ras Ħanżir near Kordin.

Aviation

• A new policy for aviation will be implemented by the Government.
• Malta International Airport announced during 2023 an investment plan of almost €200 million over five years, and the Government will also continue to invest in this sector and give it the importance it deserves.

National Air-Line

• During 2024, the government is proposing to invest the first €215 million in the new national airline which will commence operations as from 31^st March 2024.

Aircraft Leasing

• The government will be enhancing the financial infrastructure to strengthen aircraft leasing in the coming months.

Management of energy

Schemes for renewable energy

• The Government will continue the process of allowing private investors to submit offers for the development of large-scale renewable energy. The allocation of capacity for installations between 40kWp and 1MWp is expected to reach 10MWp which will result in a financial aid of approximately €44.8 million over 20 years.

Infrastructure for Charging Points 

• A plan is underway for Malta to have 1,200 electric vehicle charging point. A project is also ongoing for the Government to integrate the charging points into a single system.
• Free energy audits will continue to be provided for small and medium enterprises.
• The global impact of the Covid-19 pandemic and the conflict between Russia and Ukraine has affected international energy production. Despite global challenges, Malta has maintained stable energy prices, relying on renewable sources while other countries increased tariffs using more polluting sources.
• Malta is prioritizing national strength and effectiveness in energy, focusing on strengthening the second interconnector with Sicily for a more efficient system, including offshore renewables.
• Investments of €35 million from European funds will enhance Delimara's power station, while another project at Marsa Station 'A' will receive €12 million from the RRF.
• The Government is developing a strategy for the introduction and use of hydrogen in industries, providing clean fuel alternatives for processes still reliant on diesel or other oils.
• To strengthen national electricity distribution, a €90 million investment over 6 years (doubling in 2024) will enhance the distribution network across Malta and Gozo, including new substations and distribution centers funded by €50 million from the RePowerEU program.

Management of water

Grant for water purification projects

• The water purification scheme shall be extended to the upcoming year to aid with the reduction of plastic.
• To keep up with the demand for drinking water, this year marked the second phase of the growth of reverse osmosis, with an investment of more than €12 million. The goal is to increase production capacity by 2025 by more than 50% over the 2020 average. A process to replace old mains from which around 9km have already been implemented, with a further 11 kilometers are in a final phase to be contracted. This project extends until the year 2025, with a total expenditure of €22 million.
• Project to strengthen sewage purification plant in Sant Antnin is being commissioned and is expected to start operating in months to come. This measure, with a total expenditure of around €7 million, will be increasing sewage purification capacity in the South of Malta with more than 20%. 

The Climate Action Authority will be established to assist with achieving climate neutrality by 2050.

Urban Green Spaces

• €10 million were allocated for a greener community and work is set to commence in many different localities within Malta. Over 80,000 square meters will be regenerated, and more than 5,000 trees will be planted.

A sustainable, active and alternative public transportation system

• The Government is working on a project with a €35 million investment over 5 years whereby bicycle lanes, pedestrian crossings will be created as well as recreational areas.

Incentivizing further the purchase of vehicles which pollute less

• The scheme for the purchase of electric vehicles including electric motorcycles shall be extended as well as the financial aid for scrapping old vehicles. The scheme that incentivizes the purchase of electrical bicycles will also be extended along with the scheme for financial aid for those that convert their vehicles to run on gas instead of petrol.
• Additionally, the scheme for wheelchair-accessible vehicles including taxis used for passenger transport for hire or reward will be extended.
• For the first time there should be given financial aid for those people buying a personal e-kick scooter.
• Electric vehicles and plug-in hybrids with an electric range of 50 km or more will be exempted from registration tax as well as exempt from paying the annual road license fee for a period of 5 years from the date of their first registration.
• The government will also extend schemes for vehicles equipped with photovoltaic panels, vehicles which upgrade their diesel particulate filter (DPF) and selective catalytic reduction (SCR) systems as well as vehicles their vehicles from internal combustion engine (ICE) to electric.

Continuation of fiscal incentives for modernised property

• Fiscal Incentives will continue for individuals who purchase or sell properties that have been built for over 20 years and have remained vacant for more than 7 years or properties that are located in an Urban Conservation Area (UCA). These individuals will continue to benefit from exemptions on Capital Gains Tax and Property Transfer Tax on the first €750,000 of the property price and will be relieved from VAT up to a maximum of €54,000 on the first €300,000 in restoration and renovation expenses.
• First-time buyers will receive a grant of €15,000 or €40,000 if property is bought in Malta or Gozo respectively.

Irrestawra Darek Scheme

• There will be an extension of the Irrestawra Darek Scheme.

Health and Safety Authority

• A new law shall be introduced to establish a legal framework for the Health and Safety Authority at the workplace.

Changes to the regulation of condominiums

• During the next year, work will be ongoing to enhance the real estate industry in Malta particularly the licensing of agents operating in this sector.

• In the coming years, restoration will be completed on the Grandmaster’s Palace.

• Continued renovation on Villa Gwardamanga.

• Malta will be participating in the London Design Biennale 2024 edition to serve as a showcase for the sector and the artistic and creative field in our country.

• The Valletta Design Cluster will launch a new residency program this year for designers and researchers to continue exploring innovative solutions for urban challenges.

• Continued restoration on Manoel Theatre, MICAS and Gozo Museum, together with continued restoration on parish churches and restoration on the Vendomme Battery in Marsaxlokk.

• Extension of the reduced corporate tax rate of 7.5% applicable to sports players, coaches and athletes.

• Preparations are also in place for the first phase of works of Marsascala Waterpolo Pitch. Preparatory works are also in place for an Indoor Shooting Range which will complement the existing Shooting Range.