On the 24th of October 2022, Finance Minister Clyde Caruana presented the Malta Budget for 2023.
The 2023 Malta Budget aims at maintaining the economic growth whilst protecting the most vulnerable through the cost of living adjustment, additional allowances and in particular the containment of inflationary price spiraling. A budget that has as its main goal the retention of current utility and gas prices, potentially at the expense of new economic stimuli. A budget that does not factor the expected pressure to interest rate that persistent inflation will bring about and which may require further government intervention.
A budget that carries over and extends the prior year environmental, business and property market incentives. A budget that does not bring the tax cuts but does not introduce any new taxes either. A budget that aims for the status quo when recession is the fear.
The following are the key points and measures proposed in the Malta Budget 2023:
Economic Highlights
- Malta's economy forecasted to grow at 3.5% in 2023, outpacing EU average.
- Private consumption expected to rise by around 4%.
- Inflation forecasted to average 5.7% in 2022 and decline to 3.7% in 2023.
- National debt projected to increase to 59.1% of GDP in 2023.
- Unemployment rate expected to be around 3.1%.
Employment Market, Pensions, and Social Measures
- Cost of Living Allowance (COLA) to increase by €9.90 per week, the highest since 1990.
- Improved work benefit for workers with unsocial hours.
- Increase of €90 per child per year for children's allowance.
- Additional incentives and increases for pensioners.
- Various measures and benefits for carers and individuals with disabilities.
- Pro-rata increase in stipends and cost-of-living for students.
- Additional support for vulnerable individuals and families.
- Adjustments and incentives related to tax computations and refunds.
Incentives Applicable to the Housing Market
- €10,000 grant over ten years for first-time buyers.
- Extension of stamp duty and property tax exemptions for certain properties.
- Extension and increase of schemes supporting property purchases, renovation, and restoration.
Business Aid Measures
- Tax incentives for family business transfers and social enterprises.
- Financial assistance and grants for companies investing in digital and sustainable projects.
- Various incentives and schemes to support businesses.
Environmental Measures
- Increased grants for electric car purchases and initiatives for clean transport.
- Continued support for solar panels, solar water heaters, and EV charging points.
- Investments in water production and distribution systems.
Healthcare Measures
- Free medicines for certain conditions and urgent treatment for suspected cancer cases.
Other Measures
- Planned revisions and updates to residency schemes.