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Recapping: Malta’s Budget 2024

The 2024 budget outlines a financial trajectory aimed at stability and growth, with public debt projected to reach 55.3% of GDP, up from 52.8% in 2023.  Efforts to rein in the deficit are set to lower it to 4.5% of GDP from the previous year’s 5%. Economic growth is anticipated at 4.2%, and unemployment is expected to hold steady at 2.7%. Inflation is forecast to decrease to 3.7% in 2024, down from 5.7%. The government will persist in its support to mitigate the rising costs of energy, fuel and grains, committing €350 million in subsidies. The Cost of Living Adjustment (COLA) for 2024 will be €12.81 per week, benefitting employees, pensioners, those in receipt of social security benefits, and pro rata for students, with pensioners receiving an additional €2.19 weekly.

The budget emphasises significant investments across various sectors, including health, education, tourism, gaming, aviation, maritime, manufacturing and financial services, with a concerted effort to streamline bureaucracy. Tourism will receive targeted enhancements, focusing on infrastructure, Malta’s international links, and service quality within the hospitality sector. In addition, Gozo’s promotion will continue to receive support, and a capital investment of €215 million is allocated for a new national airline, commencing operations on 31 March 2024. Tax-wise, the current international system is set to remain unchanged, with no adoption of a 15% minimum tax rate in Malta.

Malta Budget 2024 Overview

Support Measures Detail
Social Measures
  • Cost of Living Adjustment (COLA) is raised to €12.80 per week, boosting pension payments and the minimum wage. The minimum wage will increase to €213.54 a week for 2024, and by an additional €18 per week by 2027. Individuals who depend on social benefits and whose income is lower than the specified threshold will be eligible for further government aid with rates ranging between €100 and €1,500.
  • Parents receiving the in-work benefit will gain an additional €50 for each child under 23, while low-income earners will benefit from additional tax refunds ranging from €60-140. Parents whose children continue full-time education after the age of 16 will gain €500 for three years providing their children live at home.
  • The birth and adoption allowance will rise to €500 for the first child and €1000 for any subsequent children, and children’s allowance will increase by €240 per child per year. Grants will be available to parents caring for children with severe disabilities, with those unable to work due to caring responsibilities eligible for additional financial aid.
  • Parental SSC credits will be extended to parents who start paid work after building a family, with said credits previously only available to those in paid work prior to having children.
  • Pensioners will benefit from an extra €15 a week, and the proportion of tax-exempt pensionable income for individuals is 60% in 2024 (up from 40% in 2023). The maximum pensionable income for those born before 1962 will be brought in line with those born after.
  • People who reach retirement age without qualifying for a pension will see a bonus increase of €50 each year; €500 will be given to people who have paid social security contributions for fewer than five years and €600 for fewer than 10 years. The invalidity pension will be given to individuals living with mental health issues and who have paid a minimum of 50 social contributions in total.
  • Pension rates for persons who continue to work and postpone receipt of their pension will rise from 6.5% for one year and up to 29% for a four-year postponement.
  • There are plans to facilitate automatic enrolment for occupation pension schemes, with a voluntary opt-out option being discussed.
  • Widows of officers in the disciplined forces will benefit from a new pension, while the service pension will rise by 23% and those who serve for over 29 years will receive an allowance.
  • Donations to voluntary organisations will attract tax credits and reduced tax rates.
Property Measures
  • Increases in the maximum allowance under the Rent Benefit Scheme, with grants rising to €4,200 for single-person households, €5,400 for families with one child and €6,000 for families with at least two children.
  • No tax or duty on the first €200,000 of the price for properties covered by Housing Authority schemes.
  • VAT refunds (subject to caps) to encourage restoration and renovation projects will continue throughout 2024; the scheme will be updated to remove the discrepancy between rates awarded to individuals and couples.
  • Reduced rates for first and second-time buyers will be extended for another year.
  • The continuation of stamp duty and tax exemptions on the first €750,000 of the value of UCA properties, or properties at least 20 years old and vacant for at least seven years.
  • First-time buyers of UCA or vacant homes in Malta will be eligible for a EUR15,000 grant, with EUR40,000 grants available for Gozo-based properties.
  • Gozo will no longer benefit from the reduced rate of stamp duty for purchases of residential property.
Health, Education & Public Protection
  • Additional free medication to include medication to IVF patients, people who live with mental health issues, people who suffer from asthma or pulmonary fibrosis, and ophthalmology patients. Extension of the Navigator Nurse service to assist cancer patients and their families from the day of diagnosis. Introduction of a new law to create framework for Health and Safety Authority in workplaces.
  • Student stipends will increase by €64 in proportion to the COLA increase. The Pathfinder and the AI Applied Research Grant will continue, focusing on education in AI. Post-graduate students will receive improved tax credits and scholarships, partly funded by the European Social Fund.
  • New Police Control and Community Support Officers (PCSO) to work with local communities. Creation of Dedicated Roads Policing Unit. 24-hour operating service for Victim Support Agency’s national support line. Implementation of panic alarms in a sharpened focus on tackling domestic violence.
Expatriate Workers
  • A new system will synthesise the Highly Qualified Persons Rules; incentives for highly qualified persons will be redesigned to align with specific skills needed for developing Malta’s economy.
  • Single work permits for new workers arriving from overseas will see increased issuance costs to ensure enhanced skillsets.
  • The surety of strict necessity for foreign workers will be required in a bid to prevent exploitation.
  • Agencies bringing in foreign workers must be licensed and transparent.
Business
  • The Malta Business Registrar will migrate to a new portal to streamline online registration and submissions processes for partnerships and domestic and foreign companies. A new Common Central Data Repository will be launched for identification purposes.
  • The Venture Capital Fund will facilitate investment from start-ups focused on technology and innovation. 2024 will also see the return of the Seed Investment Scheme, allowing companies that invest in start-ups to earn tax credits.
  • Several programmes will continue with the aim of helping businesses and enterprises, including the Rent Subsidy Scheme, the Innovate Scheme and the iSkills Development Scheme.
  • EU funds: SMEs will benefit from consultancy services to improve operations through investment in more sustainable measures, as well as from cash grants under the Business Enhance scheme. Those working in the digital sector, including the self-employed, will also benefit from allocated funds totalling €15 million.
  • The Malta Gaming Authority will strengthen regulations and heighten its focus on esports.
  • Malta Enterprise aims to develop a Centre of Competence in the microchips and semiconductors field to appeal to investors.
  • The National Strategy for Research and Innovation in Malta will be introduced in 2024.
  • The STEM Community Fund will be bolstered, while the Horizon Europe programme will see broader scope for participation.
  • The MFSA will introduce regulatory changes including those pertaining to notified professional investor funds and limited partnerships.
Maritime, Aviation, Agriculture & Fishing
  • A new facility cargo to be built in Ras Ħanżir. Simplified administration for companies facing different obligations under the Companies Act and the Merchant Shipping Act; unless required by these acts, small businesses will no longer need to submit audited accounts. Creation of a 20-year roadmap for the maritime industry. Introduction of new superyacht policy.
  • Government investment of €215 million in new national airline, set to begin operations from 31 March 2024. Enhanced framework to boost aircraft leasing through legislative updates and measures to attract specialist banking services.
  • The government will introduce measures to support Malta’s agricultural industry; succession tax on agricultural land that is leased or worked will be abolished, while eligible young farmers will receive aid to buy agricultural land.
  • Workers within fishing who own more than one vessel will receive incentives to encourage employment of young persons. Fisherman will benefit from financial aid when purchasing their first boat.
Energy & Sustainability
  • EU funds will help to improve electricity distribution, with a six-year investment of EUR90 million set to boost the national electricity distribution network and fund new distribution centres and substations. Plans for a second interconnector between Malta and Sicily remain in place.
  • Malta remains committed to reaching climate neutrality by 2050, under the guidance of a new authoritative body. Green and public spaces across the country will enjoy regeneration, with €10 million marked for investment in over 80,000 square metres of green space and plans to plant over 5,000 trees.
  • Several sustainability-focuses schemes have been extended for 2024, including the Smart and Sustainable Scheme and Investment Aid for Energy Efficient Projects.
  • EU funds will be spent on sustainability in urban areas with a focus on Gozo, with Gozo set to benefit from €58 million dedicated to sustainable urban development.
  • 2024 will see a range of new schemes designed to promote investment in renewable energy, including renewable power storage batteries and photovoltaic systems. Battery energy storage systems will be implemented, while plans for the use of hydrogen in industry will be developed.
  • Electric vehicle charging stations are set to expand as incentives for buying electric vehicles and grants for scrapping old vehicles are extended in 2024. Financial aid for the conversion of vehicles to allow them to run on gas will also be extended. The Grand Harbour’s shore to ship system will continue, as will plans to install the system in the Freeport.

For further information about Malta’s Budget for 2024, please contact us. 

Reference

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