Last Monday, October 11, the Minister of Finance of Malta, Clyde Caruana, presented the Budget 2022, the budget maneuver that outlines policy directions and measures planned for next year.
The presentation of the Budget, which arrives punctually every year in October, represents a much awaited moment to learn about the innovations affecting the world of business, workers, public services and public life in general from now until the near future. This year, in particular, the maneuver has a certain importance as it comes in the aftermath of the resources released by the European Union with the Recovery Fund for the revival of the Maltese economy after the coronavirus emergency, and on the eve of the political elections, scheduled between the end of November 2021 and the spring of next year.
The Budget 2022 is divided into several chapters, ranging from social to labor, through technology, training, infrastructure, health and sustainability.
So let’s review the highlights of the maneuver, especially those concerning the world of business and trade.
– As of June 2022, the interest rate due on income tax and VAT will be 7.2% per annum
– Zero tax on reinvested profits
– New investments to support “green” jobs and digitization, with incentives for businesses that invest in these spending items
– A national plan to support employment
– Support for increasing the number of apprentices in the private sector
– More financial support to encourage the commercialization of technological products
– Businesses will be monitored on the level of digitization after a skills census
– Extension of the subsidy for the rental of industrial halls in order to alleviate the existing transport cost drivers
– 2 million training program for employers to support employee retraining and growth
– Employees below a managerial position, whose base salary does not exceed 20,000 euros, will be taxed at 15% on the first 10,000 euros of extraordinary income
– Tax reduction from 15% to 10% for part-time employees
– In-Work Benefit: in order to take advantage of the benefit intended for working parents, the annual income thresholds are raised, from 26 to 35 thousand euros if one spouse works, from 35 to 50 thousand euros if both spouses work, and from 23 to 35 thousand euros for single parents
– Employees who leave the public sector for a private sector will be paid double for hours worked on Sundays
– Free childcare services extended to employees whose work hours include evenings, weekends and shifts
– Worked with union parties to increase the minimum wage and adjust wages to the cost of living
– Halved taxes on the sale or purchase of a real estate property up to a value of 200,000 euros that is leased for a period of up to 10 years to a tenant eligible for benefits granted by the Housing Authority. Taxes are zeroed out if the property is sold to the same tenant
– New strategic plan for the financial services sector
– Regeneration plan for Malta Freeport with new maritime infrastructure
– 470 million euros for the modernization of industrial areas
– Modernization of science laboratories in schools
– New incubator and further incentives for the video game and eSports sector
– Special “residence permit” and new reference point for new businesses and startups
– New agency for the regeneration of tourist areas starting from the north of Malta
– Continued implementation of Masterplan for modernization of Malta’s film studios, including construction of first soundstage
– A “green fund” will be launched to help Maltese companies invest in environmentally sustainable projects, and another fund for investments in public open spaces and green infrastructure
– Malta Enterprise will launch a grant program for businesses that replace gasoline- or diesel-powered transport vehicles with electric vehicles
– New support for energy efficiency and the use of renewables, starting with public buildings and ending with private residences. New subsidies for the purchase of less polluting vehicles and aid to encourage the use of public transport.
– As regards international relations, the Government has announced that Malta will have a non-permanent seat in the United Nations Security Council for two years.
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