On the 11th October 2021, the Minister for Finance and Employment Clyde Caruana officially presented the government’s Budget for the financial year 2022. During his Budget speech, the Finance Minister stated that although the COVID-19 pandemic has left devastating effects on the Maltese economy, resulting in a substantial deficit, Malta’s debt to the GDP ratio still ranks well when compared to other European Union Member States.
The government’s focus for the financial year 2022 shall be on strengthening the tourism and manufacturing industries, to reduce Malta’s deficit following the challenges posed by the COVID-19 pandemic and also to explore new means of economic growth, such as investing in sustainable and renewable energy and digital innovation amongst other initiatives.
Another priority for next year is to capture the revenue which is state owned with the aim to eradicate tax fraud and evasion.
In this article, we shall be mentioning some of the proposals highlighted by the Labour government during the Budget speech for the year 2022.
Pensioners shall benefit from a five Euro weekly increase to their pension. This increase represents a 1.75 Euro Cost of Living Adjustment (COLA) and an additional increase of 3.25 Euro.
Certain medicines and treatments which are currently at a charge will be offered for free as from next year. These include medicines and treatments offered to cancer patients, those who suffer from osteoporosis, fibromyalgia, circulatory and inflammatory conditions, rare diseases, persons who require IVF treatment, and for those suffering from rare or extreme allergies.
As from next year, the government also announced that more measures will be addressed to new parents, to individuals having children with disability, to parents who work on a shift basis, during weekends or the hours of the night and also to students.
Amongst the various measures introduced, the Labour government announced that with effect from next year, parents who adopt or give birth to a child will benefit from a government grant of 400 Euro. The annual allowance to parents of children with disability shall increase to 1,560 Euro and free childcare services will be offered to all those parents working during the weekends, on shifts and throughout the night.
Students will benefit from an increase of 10% on their stipend, and the government shall continue to provide it to students who choose to work up to 25 hours on a weekly basis.
As from the 1st October 2022, the Labour government shall be introducing free public transport for all Maltese and Gozitan nationals.
To encourage the purchase of electric and plug-in hybrid cars, the government has announced that it will be increasing the grant from the current 8,000 to 11,000 Euro with effect from next year. A new grant of 900 Euro will also be introduced for the installation of PV panels on vehicles such as minibuses, coaches and trucks. A 2,000 Euro grant shall be offered to those who scrape their polluting motor vehicles.
The Labour government has announced that as from next year all those who purchase a home which has been built over 20 years ago and has been vacant for more than 7 years, a property which is located in an Urban Conservation Area or new properties which are built in a typical and traditional Maltese style will be exempt from income tax on capital gains and duty on documents and transfers on the first 750,000 Euro. This measure also applies to qualifying properties for which a promise of sale agreement has already been entered into as long as the final deed of sale has not yet been signed.
What do you think about the government proposals for the year 2022? Let us know in the comments section below.