Malta Budget 2021

Luca Caruana  -  15/October/2020

Malta Budget 2021 

Download the report prepared by the Tax and Marketing team below


The Main Updates

  • The cost of living allowance will be €1.75 euro per week.
  • The lowest unemployment rate in the euro area. At 4.1%, Malta’s unemployment rate is the lowest in the Euro Area as of August. The average rate in Europe was 8.1%
  • Tax refunds to be upped between €45 and €95. Around  218,000 people will benefit from a measure which will cost the government €16 million.
  • One more day of leave for 2021: Workers will be receiving an additional day of vacation leave in 2021
  • Another round of Covid Vouchers confirmed. The €100 vouchers will this time be split 60-40 between restaurants and accommodation, and retail and services respectively. 
  • Children's Allowance to be raised. For families whose income does not exceed €25,318, the allowance will increase by €70 per child, while it will increase by €50 for those families whose income does exceed that threshold.
  • In-Work Benefit threshold increases. The thresholds of the InWork benefit are being extended. The threshold for couples where both adults work is being increased to €35,000.
  • On the other hand for working single parents, the threshold is being increased to €23,000. For couples where only one adult works, the threshold is being increased to €26,000.
  • Another increase in #Pensions. Pensioners will receive an additional €5 a week.  Pensioners will get the full COLA increase, which this year stands at €1.75 a week and also an additional €3.25 per week increase, raising their pension up by a total of €5 per week.
  • Increase in Supplementary Help. The Supplementary Help for couples and people who live by themselves with low income will be increasing between €70 and €108 according to the person or couple's income.
  • First-time buyer scheme extended. A scheme to encourage first-time buyers to buy a property is being extended. The property value eligible for a reduced tax being extended from the current €175,000 to €200,000.
  • Taxes on property donations eased. Taxes on property donations are being eased, with the first €250,000 in the value of a property being tax-exempt (up from the current €200,000)
  • Third Pillar Pension Improvement. The amount that is exempted from tax is being increased by €1,000 to €3,000.
  • Taxes reduced for #businesses. The 1.5% tax concession on the transfer of businesses is also being extended by a year.
  • The tax-free threshold for VAT-exempt businesses is being raised from the current €20,000 to €30,000.
  • More aid to start-ups. The government will be introducing schemes to help business start-ups, to encourage online business, and to help firms attract new foreign investment. 
  • Covid-19 Wage Supplement scheme to continue. The supplement will be extended to March 2021. This measure will cost around €40 million every month.
  • Malta to receive €120 million in European funds for COVID-19 recovery. The funds will be used to funds to sustain jobs which were adversely hit by the pandemic.
  • Digital Strategy: A digital strategy will be drawn up in cooperation with the Digital Economy Think Tank. The government will also focus on new technology such as virtual reality, augmented reality, immersive technology, 3D printing, and quantum and high-performance computing.
  • Online Sales and VAT: To help small operators and the self-employed the VAT exempt threshold will rise from €20,000 to €30,000. Furthermore, businesses will be assisted to increase their online sales.
  • Restarting #Tourism: A new plan for tourism will be unveiled so as to better address the dramatic changes in the sector.
  • Stimulating Gozo's economy: The government is promising to continue providing the necessary stimuli in the coming years to continue the economic performance Gozo has experienced.
  • Importation of single-use plastics banned as from 1 January. The importation of single-use plastics will be banned from 1 January and the sale of all single-use plastic products will be banned in 2022.
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