What the pre-Budget tells us about Malta’s 2025 plans

It’s that time of year again.

Social partners lobby with the government to make sure their proposals feature in the finance minister’s Budget 2025 speech next October. And as is customary, a pre-Budget document last week has also provided an analysis of the Maltese economy, the government’s initiatives over the years, and hints at what is to come in 2025.  

Here, MaltaToday takes a detailed look at the document and picks out the five most salient points that come out from the pre-Budget overview. 

A new labour market strategy 

The pre-Budget document recognises the importance of foreign workers when it comes to filling in critical skills gaps and supporting economic growth. It also says that foreign labour allows local workers to move into higher-skilled roles.  

However, the document also states that the government is currently revising its labour migration policies. According to the document, the new policy will strive to better align migration with the actual needs of the labour market. 

The strategy will be guided by four key principles: prioritising the needs of those already contributing to the economy while encouraging upskilling and reskilling, safeguarding workers’ dignity, promoting stability and retention, adopting a skills-based approach that identifies which industries need additional workers and which are adequately staffed.  

Tourism priorities 

Through MTA, new markets are being targeted in the USA, Japan, Australia and the Gulf to ensure a consistent flow of tourists year-round and make stronger arguments as to why Malta has the potential to be air-connected with these markets. 

Meanwhile, the priorities for 2025 and beyond are to attract higher quality tourists by strengthening Malta’s hospitality offer, improving public cleanliness, solidifying primary source markets, targeting long haul markets, integrating sustainability and preserving Malta’s heritage.  

National Transport Master Plan 

The last NTMP was published in 2016 with an aim of addressing major transportation issues by 2025. Most of the issues haven’t been addressed, but this won’t stop the government from trying again. 

According to the pre-Budget document, work on a new NTMP is ongoing, and it will introduce several measures to address traffic congestion and lower greenhouse gas emissions while encouraging the use of alternative modes of transport.  

Taxes, taxes, taxes 

During the pre-Budget press conference, finance minister Clyde Caruana confirmed that negotiations are still underway at EU level on the measures Malta could introduce in line with the global minimum corporate tax rate. These negotiations have been lengthy, so there’s unlikely to be any specific budget measures to this effect come October.  

Meanwhile, the Malta Tax and Customs Administration is undergoing a review of the Revenue Management Acts, including those for Customs, to develop one Consolidated Revenue Management Act to ensure consistency, alignment and uniformity in the administration of all tax types, including interest and penalties.  

A Large Taxpayer Office is also being set up to provide support and monitor large taxpayers and High Value Network Individuals (HVNIs). It turns out that large taxpayers and HVNIs represent 80% of total revenue collected.  

Subsidies here to stay (for now) 

Cereals and energy subsidies will not be going anywhere, and not even the European Commission can tell us otherwise. 

Caruana said at the pre-Budget launch that as long as Malta is reaching its debt and deficit goals, the blanket energy subsidies will remain in place. 

Earlier this year, the European Commission recommended opening a deficit-based excessive deficit procedure for Malta, among other countries. In its recommendation, the Commission also suggested that Malta “winds down” its emergency energy support measures by this winter, so that any measures are targeted towards supporting vulnerable families and companies.  

Government forecasts indicate Malta will reach its deficit and debt goals even with these aid schemes in place. Indeed, public spending on the food and energy subsidies as a percentage of GDP will stand at 0.7% in 2025, down from 1.4% in 2023.