Scrapping corporate tax refund system, raising minimum wage proposed in MDA pre-budget wishlist

The Malta Development Association, a lobby group for the construction industry, has published its list of recommendations for the 2025 budget, advocating amongst other things, that the national minimum monthly wage be increased to €1,100 and a blanket corporate tax rate for both local and foreign companies.

Other suggestions include making foreign purchasers of properties worth over €1 million exempt from the requirement of obtaining a permit, renewing previous schemes that incentivised the restoration of old properties and purchases by first- and second-time buyers. 

Tax breaks for drivers who use off-street parking and making the interest paid on home loans tax-deductible are among the more adventurous proposals.

The lobby is proposing a flat 15% tax rate for all businesses, as part of a complete overhaul of Malta’s corporate tax framework, which would see the effective 5% tax rate on foreign businesses - currently one of the biggest draws for Malta’s financial services industry-  increasing year on year, while the 35% rate paid by local businesses gradually decreases.

The MDA is also proposing a shakeup of the tax regime for landlords, recommending that long-term property leases of under €1,000 per month be taxed at 5%, as opposed to the current blanket 15% rate.

The full list of proposals can be accessed at https://mda.com.mt/mda-budget-proposals/