Malta’s Budget For 2022: Explained

 

Finance Minister Clyde Caruana has officially presented the government’s budget for the upcoming year, even referring to the ‘biggest ever financial boost for the environment’.

 

 

The annual budget details the ways in which the government aims on raising revenue and spending public funds throughout 2022.

 

 

Caruana kicked off the presentation with a discussion on pensions, which will see a €5 rise a week – a €1.75 COLA increase together with a €3.25 weekly increase. This will cost taxpayers €26M. Service pensions are expected to go up by €200. However, cost of living bonuses will ‘gradually’ be distributed to everyone who retired from 2008 onwards.

 

 

For those who retired but do not qualify for a pension, an additional €150 cheque may be expected. Caruana clarified that some 12,000 people, ‘mostly women’, will benefit.

 

Finance Minister: 'It's time to look at another plan for Malta's workforce'

 

The government is also revising its free medicine list. Now, as of 2022, medicines for cancer, osteoporosis, fibromyalgia, circulatory conditions, inflammatory conditions, rare diseases, IVF patients, and certain rare and extreme allergies will be added. Senior citizens aged 80 and over who are eligible for a supplementary allowance will also be eligible for free medicines in 2022.

 

 

If you plan on having a baby or adopting a child next year, you will get an increase of €100 to the new parents’ grant, which currently stands at €300. Put simply, new parents will receive a €400 grant as of 2022.

 

Clyde Caruana picked for OPM chief of staff

 

Disability benefits will also be revised, with allowances for children with a disability increasing to €1560 annually and carers of people with severe disability to €500. Meanwhile, the grant for a carer at a home will rise to by €1,000 to €7,000 per year and the subsidies for the Home Helper Of Your Choice Scheme will rise to €7/hr (from €5.50).

 

 

€11 million will be allocated to fixing ‘past injustices’ related to old Enemalta workers. School headmasters will also receive €10,000 individually to allocate towards disadvantaged children.

 

pink pig figurine on white surface

 

In an effort to boost their pension, part-time employees will be allowed to pay social security contributions on more than one part-time job, up to 40 hours a working week.

 

 

Donations of up to €20,000 – including air space – will no longer be factored into pensions calculations.

Pre-1995 rent housing valued at up to €250,000 that requires structural repairs will now be eligible for subsidies of up to €25,000. There will also be tax benefits for private property being rented out as affordable housing, but any such property sold to tenants won’t be subject to tax. The government will also allocate €300,000 to back the church’s Foundation for Affordable Housing.

 

A man with his hands covered with mud

 

Workers who work ‘atypical hours’ (such as night and weekend shifts) and earn up to €20,000 annually will get a €150 in-work benefit. This is aimed primarily at hospitality workers, admin staff, manufacturing, and transport jobs, as Caruana revealed. However, you must have worked for at least six months in the job to be eligible. Those working night shifts will also benefit from free childcare services.

 

 

Part-time workers will see a 5% deduction from their 15% tax rate, meaning it will now stand at 10% tax rate. By 2026, income earned by working pensions will not be subject to tax.

 

 

Working parents who earn up to €50,000 annually collectively will be eligible for higher in-work benefits. Single parents will also be eligible if they earn up to €35,000 a year. And in families with one working parent, income can reach €35,000 a year.

 

black smartphone near person

 

The annual tax refund cheques will also see a slight increase, with cheques ranging from €60 to €140.

This year’s Cost-of-Living-Adjustment will be of €1.75 a week. As for the students, stipend will see a 10% increase and students will be enabled to work 25 hours a week without forfeiting stipend.

The Xewkija heliport will be receiving an upgrade and plans are underway for Buġibba.

 

 

Anyone passing on a family business to a relative will only pay 1.5% in stamp duty on the transfer, as oppose to 5%. In the meantime, €470M will be allocated to industrial estates.

 

spilled coins from the jar

 

With regards to unpaid VAT or income tax, Caruana shared: ‘It will no longer be the norm for interest payments to be waived. Interest will only be waived in line with the law, and everyone else will have to pay a 7.2% interest rate’. ‘Everyone has to pay their taxes,’ the minister added.

 

 

There will be no capital gains tax or stamp duty on the sale of properties over 20 years old – and abandoned for the past seven years or more, in UCAs, or built in the ‘traditional style’. Incentives for first time buyers in Gozo will also double to €30,000.

 

pine trees

 

An afforestation project has also been allocated in the budget. Caruana says the government is committed to implementing a plan to turn Inwadar into a park ‘larger than Buskett’. €20M will be invested in this project over the next five years.

 

 

As of October 1, 2022, buses will be freed to ride for all Tallinja card holders. This will make Malta the second EU country after Luxembourg to make public transport free. A handful of schemes will also be introduced to encourage the purchase of solar panels, solar water heaters, heat pumps, etc.

 

solar panels on green field

 

There’s the promise of a €900 grant to be allocated for trucks, buses, and minibuses with PV panels. Plug-in hybrid cars will also see an increase of €3,000. For electric cars, the grant will be of €11,000, rising to €12,000 if you scrap an old car in the process. Grants for scrapping will rise to €2,000. VAT refunds for bicycle and electric bikes will persist.

 

 

Caruana also mentioned the government’s plans to build a waste-to-energy plant in Maghtab, even promising smart bins for commercial establishments to separate their waste 24/7.

 

green plant on persons hand

 

A new water project to provide recycled sewage water to farmers to irrigate with will be extended.  A new reverse osmosis plant currently being built in Gozo’s Hondoq will operate from next year. Farmers will also be eligible for up to €8,000 if they turn unused agricultural land into orchards of fruit trees.

 

 

There are plans to develop a new blood bank, as well as a facility for stem cell processing and storage.

Continuous blood glucose monitors for diabetes type 1 patients will be given for free to all such patients aged 17 to 21.

A new football ground in Msida is also set to be built, as well as work on WaterPolo pitches in Marsascala, Valletta, and Marsaxlokk.

There will also be tax incentives for artists – a 7.5% tax rate – and funds to help organisers impacted by COVID to recoup costs.

Work will begin on a new prison wing focused primarily on rehab within Corradino Correctional Facility that will host 140 inmates.

 

Caruana also made a handful of noticeable promises, including investment in autism units; Braille machines for schools; more vertical gardens; schemes for people who require occupational therapy; a ‘drive from wheelchair’ vehicle to teach the physically disabled how to drive; and better pension plans, primarily for women.

Bay Way Hoodie (Unisex)

Our limited-edition hoodie just dropped. Grab yours now!