On the 28th of October, Finance Minister Clyde Caruana presented the government’s plans for 2025. The below is a summary of the main points that were discussed.
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Economy
The economy is set to grow by 4.9% this year and is projected to grow by 4.3% in 2025.
Malta’s debt-to-GDP ratio rose to 50%, compared to the 43% pre-pandemic. The deficit will drop to 4% in 2024. Inflation will average at 2.5% this year and is set to drop further in 2025. Employment will reach 4.6% in 2024.
The Cost of Living Adjustment (COLA) will be €5.24 per week. The COLA is calculated based on inflation rates. Minimum wage will increase by €8.24 per week, bringing the total weekly minimum wage to €221.78. The minimum wage will fall below the new tax threshold. Pensions are increasing by €8 per week, including COLA. The tax cap for pensioners who continue to work will increase from 60% to 80%.
Enterprise
The government will be setting up a database of volunteers that NGOs can use to match with people who have the skills required.
Tenders for public healthcare expansion will be issued in the private sector, and the government will be investing in this sector to bring down waiting lists.
The government will focus on growing family office businesses, limited partnerships of the gaming sector.
A grant allocation to fund local film productions, Creative Malta grant, is to increase to €2 million.
A hub will be set up in Ħal Far to help startups expand their operations. The SME park in Ħal Far will continue to grow.
Tax
The minimum income tax threshold was increased to €12,000 for single rates, €15,000 for married rates, and €13,000 for parent rates.
The specialized therapy tax credit will increase to €750 for parents with children with disabilities.
Companies that make donations to voluntary organisations will receive a tax credit of up to €500.
Fiscal incentives ranging from VAT refunds and capital gains tax exemptions to restore old properties will be renewed.
Social
The government is encouraging the take-up of private pensions, particularly the government will be matching contributions of public sector workers who take out a private pension.
The children’s allowance will rise by €250 for the second year in a row. Additionally, families who have a third child will receive €1,500. Marriage allowance is increasing to €500, an increase of €170. Couples opting for IVF treatment will receive 100 hours paid leave. Foster parents will receive an additional €10 per week, bringing the total allowance to €120. A disability allowance for children is set to increase to €35 per week.
People born after 1976 will have to pay an extra year of National Insurance to get a full pension.
The first-time buyers property scheme is to be continued. The stamp duty reduction for second-time buyers will also continue.
Parents with children in private schools will receive tax credits according to the stage of education of their children. In an effort to encourage children from vulnerable families qualifying from scheme 9 assistance, will be eligible for a ‘home library’ grant.