Clyde Caruana gives run-down on tax Budget measures

New tax rates and social benefits planned for 2022 will serve as a €56 million injection into the economy, Finance Minister Clyde Caruana said on Monday.

During a press conference, Caruana gave a brief run-down of the new tax and social benefits schemes that will be introduced in the coming year.

A popular budgetary measure taken last October was a lower tax rate for overtime and part-time work. Workers earning up to €20,000 and who are not in a managerial position will benefit from a flat 15% tax rate on the first €10,000 they receive from overtime work.

Caruana said that 30,000 workers are expected to benefit from a lower tax on overtime work. In total, they will save €6 million from the scheme, he said.

For part-time work, government lowered the income tax to 10% from 15%. Caruana said that this will benefit 23,000 workers who will enjoy €5 million more in their pockets per year.

Caruana mentioned that government extended the annual threshold of the in-work benefit scheme from €35,000 to €55,000.

In total, all in-work benefit measures for 2022 will cost €12.5 million.

New beneficiaries of the scheme will receive €200 per year, and existing beneficiaries will receive an additional €100 on top of what they received through the in-work benefit last year.

For pensioners, Caruana reiterated that the cost of living bonus will be paid in full to all pensioners who retired after 2008. The base increase for pensions in €5 per week, but some pensioners will be eligible over €10 a week.

In total, pension-related budgetary measures will cost government €38 million.

“The increase that pensioners are receiving is substantial. This measure isn’t a one-off as it builds on previous budgets. The only difference is that this is one of the biggest increases we we’ve given,” Caruana said.

Stipends will be increasing by 10% for students in post-secondary and tertiary education. Caruana said that 15,000 students will benefit from the increase, bringing the total cost to €5 million.