How it affects you

Smokers and wine lovers

The rate of excise tax on cigarettes and tobacco, fuel and cement will be revised upwards, however the price of fuel will still decrease. Revision of excise tax on mobile phone lines and an excise tax on wine. Government will replace the eco-contribution on tyres, ammunition and petroleum oils with excise tax.

Revision in Stamp Duties

Stamp duty on insurance documents and services will be revised. No changes will be made to stamp duties on life insurance policies.

Revision in licences

Licences on cars that pollute by more than 100g/km of Co2 will be reviewed, while those with Co2 emission rates of not more than 100g/km and registered after 2009 will not be affected. Increase in licences of swimming pools.

Income tax

The rate of personal income tax of 29.0% applicable to those who earn €60,000 or less will be reduced to 25.0%. This will apply to every computation: single, married and parental. Income from dividends received by individuals will remain taxable at the same rate.

COLA

COLA at €0.58 and full amount of COLA will be granted to pensioners.

One-time bonus

Annual bonus of €35 to all persons in receipt of social security benefits, all low income earners, and all those income tax payers working full-time not benefitting from the 2015 income tax reductions. It will also be given on a pro-rata basis to students and part-time workers.

In-Work Benefit

Benefit for low-to-medium income families where both spouses are in employment and have dependent children up to 23 years of age. This benefit will also apply to single parents in employment.

Extension of Free Childcare

Government committed to maintain and expand this service.

Benefits for Single Parents – Tapering

Single parents on social assistance can at present retain their benefits if they are earning less than €56.94 a week. As from 1 January, 2015, this clause will be replaced with tapering of benefits. Single parents who become employed will retain 65.0% of social assistance for the first year, 45.0% for the second year and 25.0% on the third year. Their employers will also benefit from 25.0% of the benefit for the first three years. This means that single parents will be able to substantially improve their income if they enter employment.

Youth Guarantee

New claimants for social assistance benefits, under the age of 23, will be placed on Youth Guarantee. Existing claimants, under the age of 23 years, will be given a time window of four months to enter Youth Guarantee. Single parents will be exempted until their youngest child is one year old. For 2015, 700 Traineeships and 200 Work Trials will be financed.

Tapering of benefits after marriage

From the start of next year, a person who is receiving social benefits and gets married, or forms a civil union, with a person in employment will no longer lose entitlement to social benefits immediately after the union. Instead, the social assistance will be reduced gradually over a period of three years.

Regularisation of benefits

Persons on social benefits will have up to February 2015 to regularise their position if abusively receiving benefits. Thereafter, in case of abuse, a penalty will apply.

Removal of eco-tax

Removal of eco-contribution on electronic and white goods classified as WEEE items, by September 2015.

Seed Investment Programme

Income tax law will be amended to provide tax credits equivalent to investment made in start-ups, up to a maximum of €250,000 per year.

Family Business Act

Clear definition of what constitutes a family business will facilitate and incentivise the transfer of business between members of the same family.

Social enterprise

Community Work Scheme for social enterprise, with minimum wage for workers services to schools and local councils.

Public-Private Initiatives – Projects Malta

PPPs for enlargement of sandy beaches, breakwater between Valletta and Sliema. Among other benefits, Bighi hotel, Cospicua health centre.

Cruise liner casinos

Cruise liners can remain in Malta overnight. They will be able to open their casinos after obtaining approval from the Lotteries and Gaming Authority upon the payment of a fee

Tax Refunds for Non-EU Residents

A number of countries operate various schemes whereby visitors, coming from countries outside of the European Union (EU), can obtain a refund on VAT before leaving the country. During the next year, this Administration will be introducing similar systems in Malta.

Gaming Malta

The LGA will be converted to a Malta Gaming Authority.

Shop Opening Hours

Rules governing shops opening days and hours will be revised.

‘Sukuk’ and Islamic Banking

Necessary legislative changes will be made to attract and facilitate financial institutions involved in this sector to start operating in Malta.

Trade Malta

Joint venture between the Government, the Chamber of Commerce, Enterprise and Industry to enable Maltese enterprises to better exploit international markets.

Scheme for Valletta shops

A scheme for retail outlets in Valletta will be set up, which includes the opportunity for owners to apply for the title of ground rent instead of a lease.

Wi-Fi State

Making Malta into ‘Wi-Fi state’. Currently there are 191 hot spot areas of free internet, these will be extended to cover more places.

Police and army

New CEO for police corps and border revenue corps to fight tax evasion.

Increase in university stipends

Stipends will increase by the pro-rata amount of COLA and for the first time, these will be topped up by a one-time additional pro-rata bonus per week in view of the fact that students are solely dependent on COLA as the main source of increase to their student income.

Reduction in VAT on digital books

5% on e-books instead of 18%

New schools

New schools in Rabat, Malta, Naxxar and Rabat, Gozo. As from next year, work will start on building two new schools in Dingli and Kirkop.

White Paper on School Opening Hours

White Paper to initiate a process of consultation with regard to the transport of children and school opening hours.

EOI on Recycling Plastic Waste

An expression of interest will be issued to introduce recycling of plastic waste.

Environmental Taxes

Tax on feed used in fish farms

Reduction in Utility Rates for Industry

As promised, in 2015, utility rates for the industry will be reduced.

PPP in the Health Sector

Company to finance orthopaedic specialists at Mater Dei Hospital committing them to increase the number of operations carried out during their normal working day and continue with a number of operations in their spare time including weekends. The aim is to reduce the waiting list substantially. This pilot project aims to maximise the use of operating theatres as well as the equipment at Mater Dei Hospital.

Changes to the POYC System

The POYC IT system has been further extended so that it now includes medicines issued on the pink and grey cards. For the year 2015, the Government plans to import new medicines for the treatment of diabetes and review the entitlement criteria for various medicines.

White Paper on Organ Donation

Government intends to decrease the waiting list for transplants and also provide adequate security in this sector.

Ex-Gratia Payment on Registration Tax

Those registered a vehicle for personal use between the 1st May and the 31st December 2004 will receive a refund.

Elimination of Registration Tax on Vintage Motorcycles

No tax on new motorcycles with a cylinder capacity of 250cc or less, while a registration tax of 11.0 per cent is payable on motorcycles considered ‘old’. Reduced tax on ATVs or quad bikes will be reduced.

School or Scheduled Transport

Parents get tax credit on part of transport charges, up to a maximum of €150 if they use school or scheduled transport.

Pedelec Bicycles

Sum of 15.25% of the cost of this category of bicycles during 2015.

Waterpolo players

Following the measure announced in the Budget for 2014 of giving a tax rebate to professional football players, this scheme is being extended to include water polo players.

PPP for the Marsa Racecourse

An expression of interest will be issued for private investors to join in the management of the Marsa Racecourse.

Buying-Back National Insurance Contributions

A number of persons born between 1950 and 1956, and who are currently in employment but by the time they reach their retirement age would not have made enough contributions to reach the National minimum pension, will now be given the opportunity to pay back a maximum of five years of contributions so that they will qualify for a minimum pension once they retire.

Compensation for NI

Presently, there are a substantial number of people who worked for a number of years, paid their contributions for the period in which they were working, but received nothing back because they do not qualify for the minimum pension. Therefore, as of next year, the Government will launch a scheme whereby these people will be given a yearly lump sum of money.

This means that persons born between 1941 to 1953, will receive an annual fixed amount of €100 if they had paid contributions for one year or more, but less than five years and €200 if they had paid contributions for five years or more.

Funding maternity leave

A special fund to finance maternity leave. As from January 1, 2015, the rate of this benefit will be increased and paid at a rate equivalent to the National Minimum Wage. Women in self-employment will have their maternity benefit rate increased to the minimum wage for their 14 weeks of maternity leave.

Tax-free charity

Companies donating not less than €2,000 to Malta Community Chest Fund, will get 50% of the amount of donation deducted from their 2015 taxable income.

Pensions for CPD employees

Every CPD employee will be able to benefit from a retirement pension on reaching 25 years of service.

Homes for diabled people

The Government will commence the development of the first 10 residential homes in the community for disabled persons.

Disabled in labour market

Employer who employs a disabled person will be exempt from paying social security contributions for such employee, and maximum tax credit of €4,500 for each disabled employee.

Full Disability Pension

Disabled persons in employment to earn more than a minimum wage to get the full disability pension.

Reform of Drug Laws

Asset Management Bureau that will focus on the confiscation of assets acquired through ‘dirty’ criminal money.

Final Withholding Tax

With effect from January 1, 2015, the 35.0 per cent Capital Gain Tax will be replaced by an 8.0 per cent Final Withholding Tax (FWT), applicable to traders and non-traders alike. However, in case of non-traders, property acquired before 2004, the applicable FWT rate will be 10.0 per cent, while for property acquired less than five years before the transfer of title, the FWT rate will be 5.0 per cent. This change will improve revenue tax as well as reduce the bureaucratic procedure.

Child Supplement

Child supplement of €400 for every child until the second child, and €200 from the third child onwards, to families whose household income is less than €11,900. The supplement will be tied to school attendance, regular medical check-ups and the child’s participation in sport and cultural activities, with the aim of improving the children’s education and psychosocial health. 22,000 children in 9,000 families will benefit from this measure.

Exemption on purchase of first property

Extension of one-time concession for those individuals who had never owned immovable property and who purchased property as a residence during 2014.

Lower prices for fuel

The price of gas will remain stable at €18 until April 2015. The price of unleaded petrol will go down by €0.02 and that of diesel will go down by €0.01 as from January 1, 2015.

Tax exemption on property divided between Co-Owners

In cases of contracts for the division of immovable property where the owner acquires a share which has the same value as when it was undivided, no tax will be payable. This measure will give owners the chance to divide their property between them without having to pay excessive taxes. Co-owners will have the facility of not selling their share.

Exemption from Capital Gains Tax

Exemption on capital gains and stamp duty on property, whose transfer of title occurred from one of the owners to the other, and was acquired by two individuals with the aim of residing in it or building their main residence there on.