Category: Budget

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Malta Budget Summary 2019

Categories Economy, Blockchain, Cryptocurrency, VAT, ICOs, Malta, E&S Group, Technology, Budget

Malta Budget Summary 2019

The 2019 Malta Budget was presented on Monday 22nd of October 2018. Finance Minister Edward Scicluna noted a number of economic improvements that have occurred in Malta over the past year, specifically highlighting the following:

  • The first half of 2018 saw a real GDP increase of 5.4%;
  • Public administration, professional services, distributive trades and tourism-related activities, together with gaming and betting activities remain the highest contributors to growth;
  • Public administration, gaming, professional services, distributive trade and tourism-related activities contributed to 81% of the aggregate salary income annual growth earned during the first six months of 2018;
  • During the first half of 2018, total private consumption increased by 6.6%;
  • The gainfully occupied continued to increase and labour market is operating at an unemployment rate of less than 4.0%;
  • Surplus increased to 12.8% of GDP in the second quarter of 2018.

All of these facts indicate a healthy economy with the real GDP projected at 5.3%, real investment levels to rise by 8.4%, and inflation expected to rise from 1.3% to 1.7% during 2019.

In terms of plans for 2019, the minister made announcements in the following areas.

Infrastructure and the Environment

A number of measures have been introduced that will tackle the need to upgrade public transport, roads, energy sources, and public health facilities. Investment will also be given to the Malta film industry with the Rinella studio facilities being upgraded.

  • Public transport will receive a further investment which will be used to upgrade existing infrastructure. Malta’s road network will also receive EUR100 million towards the 7-year plan that was announced during 2018’s budget.
  • The maritime and aviation industry will receive further investment and commitment towards its strengthening.
  • Significant funds will be invested in renewable energy sources and increasing energy efficiency awareness. This will include the upgrade of electricity distribution centres in Paceville, Marsaskala and Kappara, as well as new reverse osmosis centres, and a new water distribution tunnel between Pembroke and Ta’ Qali.
  • Significant investment will be given towards the upgrading of the Rinella filming and tank facilities in a bid to continue the popularity of Malta as a filming location for international productions.
  • There will be an upgrade of existing mental health facilities as well as a new mental health hospital, a new outpatients block, and a 500-car underground carpark at Mater Dei.

Regulatory Authorities

Investment in startups, SMEs, and Fintech business operating in or from Malta is expected to be forthcoming as well as additional trading options on the Malta Stock Exchange.

  • Further investment to support SMEs and infrastructure projects.
  • REITS will be allowed to trade on the Malta Stock Exchange for the first time.
  • Assistance to be given to local Fintech companies in the form of a Fintech Accelerator Programme.
  • An increase in partnerships with entities operating with the blockchain and cryptocurrency sector.


Significant effort will be made to curb tax avoidance and changes will be made to various residency schemes as an effort to continue the support for foreign talent.

  • The introduction of a new IP and trademark act will aim to encourage more business to Malta, as well as more innovation on the island.
  • Student visas and the Malta Residency and Visa Programme will continue its progressive stance to attract more foreign talent to the country.
  • The Anti-Tax Avoidance Directive will be introduced as of 1st of January 2019 and will represent a range of anti-tax avoidance measures including:
    • An interest limitation rule that will apply when the borrowing costs of a company exceed the interest that is received. Excess interest deductions will be capped at 30% of the EBITDA if the borrowing costs are under EUR 3m and they do not apply to financial undertakings.
    • If a company changes its tax residence or transfers to another jurisdiction, the company will be subject to exit tax on its accrued gains.
    • A controlled foreign company rule will be introduced which shall subject to tax in Malta profits which are derived by a direct/indirect subsidiary of a Maltese company, where the tax paid on such profits outside of Malta is less than half of the tax that would have been paid had the income been subject to tax in Malta. This rule shall be subject to certain minimum thresholds to be established by law.


Changes to VAT will encourage citizens to use other forms of personal transport and a lower rate of VAT will be payable on e-books and other digital publications, showing awareness of the digital economy growth.

  • Reduced VAT rate on electronic publications will include just 5% VAT on e-books and other digital publications.
  • Grant on purchase of bicycles and electric bikes, motorcycles and scooters with recipients receiving a 15.25% grant up to €400
  • Grant on domestic water purification apparatus with VAT charged to maximum of €70.
  • Refund of VAT paid on vehicle registration tax with the final tranche of VAT refunds on vehicle registration, registered in 2008 being paid during 2019.
  • Additional free-trade zones are expected to be announced.


Efforts have been announced to support the rental market, as well as to encourage first-time, and second-time home buyers.

  • Duty exemption for first-time buyers on purchase prices up to €150,000.
  • Reduction in duty for second-time home buyers will include a refund of up to €3000.
  • Duty on acquisition of property in an Urban Conservation Areas will be at a reduced rate of 2.5%.
  • Duty on property purchased in Gozo will stand at 2%.
  • The amount allocated for property rental subsidies will increase.
  • Landlords who rent property at an ‘affordable rate’ for seven years, will receive a Government incentive.
  • Equity sharing scheme whereby someone over 40 could receive a loan to purchase a residential home where the government would pay the interest.
  • Home equity release program whereby a pensioner can remain in their home and receive monthly instalment payments in exchange for the assignment of the right over the property or a proportion of it.

Social Matters

Important measures have been announced for those on low incomes, the elderly, and people living with disabilities. Pensions will increase and investment and saving options will be given to those over the age of 62.

  • An additional one day of leave entitlement will be given to every employed person in Malta.
  • The minimum wage will increase by EUR 3 per week.
  • The amount allocated to each recipient of Children’s Allowance will increase.
  • Families that earn less than EUR 20,000 per annum will see an increase of EUR 96 per annum.
  • Those that suffer from chronic illnesses will receive an additional increase of EUR 5.14 per week.
  • The COLA increase will amount to EUR 2.33 per week.
  • Those receiving pensions will gain an extra EUR 2.17 per week and measures shall be introduced to enhance the Third Pillar Pension Scheme and the Voluntary Occupation Pension Scheme. These include an increase of the tax credit from 15% to 25% of the qualifying contribution with private pensions.
  • Citizens over the age of 75 will receive a grant of EUR 300.
  • For those aged 62 and over, a Government savings bond will be available.
  • Compliant voluntary organisations duly registered and recognised by the Commissioner for Voluntary Organisations having an annual income not exceeding €10,000 shall benefit from a tax exemption.
  • Tax refunds granted during 2018 to employees earning less than €60,000 shall also be granted in 2019. These refunds range between €40 and €68, depending on the level of income.
  • The reduced duty rate of 1.5% currently applicable for qualifying business transfers effected by parents to their children shall be extended by another year.

The Digital Economy

Reiterating the Government’s commitment to the Digital Economy, measures to tackle taxation and AML will be introduced as well as additional efforts to encourage foreign investment and business.

  • An international taxation system will be developed and strengthened that will reflect the ongoing digitalization of the economy.
  • Additional Anti-Money Laundering measures will be adopted to support the increase in digital business.
  • Significant investment will be allocated to blockchain, artificial intelligence, and the internet of things startups and entrepreneurs on the island.
  • A feasibility study of 5G technology will be conducted.
  • The website will be launched with the aim of marketing Malta’s efforts in disruptive technologies and innovations.

To find out how the Malta Budget 2019 will effect you, your business, your operations, or your employees, contact E&S Group today by sending us an email on [email protected]

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Eurostat released high promising figures showing Malta’s surplus

Categories Economy, Malta, Governance, UN, Budget

Eurostat released high promising figures showing Malta’s surplus

On the day that the Finance Minister is expected to deliver his budget speech for 2019, the National Statistics Office (NSO) and the Eurostat released promising figures showing Malta having the highest surplus within the EU.

The report was released by Malta Today, stated that in 2017 Malta registered its highest surplus of €392.7 million. This is equivalent to 3.5% of the Gross Domestic Product (GDP). Moreover, the Gross consolidated debt has amounted to €5.7 billion equivalent to 50.9% of Malta’s GDP, which is less than the previous year by €64.3 million.

Statistics show that the total revenue generated by the Maltese government in 2017 stood at €4.4 million, which is a substantial increase of €554.3 million from that in 2016. Moreover, the total amount of expenditure compared to the previous year have amounted to €4 million resulting to an increase of €257.9 million.

The figures show that the gross consolidated debt have decreased by €64.3 million compared to last year, now standing at €5.7 billion, amounting to 50.9% of the GDP. This figure abides by the Maastricht Treaty set by the EU stating that all member states need to follow “sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP.”

This report has shown that Malta has reached a good surplus of 1.7%, which is higher than Cyprus, which holds the second place of surplus reaching 1.8%. This is followed by Sweden, Czechia, Luxembourg, the Netherlands, Bulgaria and Denmark, Germany, Croatia, Greece, Lithuania and Slovenia.

In a tweet Prime Minister Joseph Muscat wrote “#Malta had the highest fiscal surplus in the #EU in 2017, as confirmed by @EU_Eurostat. Data for first half of 2018 indicates similar trend. In #maltabudget19 we will continue rolling out our economic and social strategy -JM”


Tonight, Malta is anticipating the Budget measures that will be proposed by the government. If you interested to know what will be said during the budget follow this link to know more. If you would like to open up a company in Malta and need a professional guidance, drop us a line by sending us an email on [email protected] and we will ‘make things happen’.

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A brief overview of Malta’s Budget 2019 

Categories Blockchain, Cryptocurrency, Malta, Regulation, Artificial Intelligence, Know Your Customer, Anti Money Laundering, DLT, Budget

A brief overview of Malta’s Budget 2019

The Maltese Budget for 2019 is set to be announced on Monday 22nd of October, but what can we expect? Following the 2018 budget, 79% of the measures introduced within it were fulfilled during 2018, bringing to over 1,250 implemented measures over the last five years in total.

Entitled “Fostering a Quality Culture”, the Pre-Budget 2019 Document has given us some key points that we are expecting to be addressed in Monday’s reading.


Investing in the country’s infrastructure, including public transport is expected to be a priority for the government, directly referencing the authority’s pledge to upgrade the national infrastructure over the next seven years. Other means of alternative transport are also expected to be announced as well as conceptual designs for the Malta-Gozo tunnel. Other areas expected to receive additional investment include maritime, aviation, and the digitization of The Lands Authority. The well-developed infrastructure can boost the real-estate growth and attract more foreign entrepreneurs and businessmen to the island on a permanent basis.

Regulatory Authorities

Following the implementation of the 4th AML Directive, the government is expected to announce further dedication towards addressing fiscal evasion as well as giving the Malta Customs greater investment towards non-invasive tools. The report also mentioned work that needs to be done at the stock exchange and the Malta Development Bank which focuses on SMEs and infrastructure projects supporting regional development.

New frameworks to be introduced will limit unnecessary expenditure, reduce inefficiencies, and create the Public Sector Performance and Evaluation Directorate. An extensive training programme, financed partially by the Structural Reform Support Programme, will improve human resources capacity. However, the competition on the labour market is not likely to decline due to the foreign companies entering the market with their employees on board.

Social Matters

The document addresses issues around housing and distribution of income and suggests that issues such as minimum wage, pensions, and tax refunds will be addressed.

The Environment

Waste management will be consolidated at Magħtab to provide a “national waste management nucleus” and to avoid unnecessary movement of vehicles. The government is expected to focus on a greener economy by announcing initiatives that will reduce the amount of waste and single-use plastic. Further work is expected on the Malta strategy to transition to a low-carbon economy.

The document also makes reference to conserving natural assets and taking necessary action, as well as simplifying the legal framework for agricultural operators, and reforming open vegetable markets. The government is also expected to continue its efforts to promote animal welfare, the sustainability of fish stocks, and the competitiveness of fishermen.

Let us hope that the solid part of the budget is dedicated to environmental improvement and conservation needs because the rapid development of the infrastructure is able to shake the balance between nature and technology.

Energy and Water

Water Services Corporation will continue to expand its distribution of new water as well as upgrading several reverse osmosis plants. The money will be invested in identifying significant flood risk areas and improving them, both across Malta and Gozo. Attention will also be given to decarbonising of the energy system and introducing further incentives to invest in renewable energy sources and increasing energy efficiency awareness.

Digital Innovation

A new legislation regarding online gaming is expected to be enforced, including new niches such as fantasy sports.

Blockchain is also expected to have a significant investment, as well as artificial intelligence, and the Internet of Things – all of which will be given significant support over the coming years.

Fintech and Regtech will be further developed as well as Islamic finance, and the MFSA will adopt a more modern structure making it more proactive. The international companies are waiting for the three regulatory acts to come into force to consider Malta as their new base.


Malta Enterprise will continue to support businesses by reducing costs and encouraging investment in research and development. Intellectual Property services will be restructured and a new trademark act will be created as well.

Malta Industrial Parks (MIP) will integrate business parks to accommodate clusters of industries in the same location whilst considering vertical or horizontal expansion. MIP will also consider private-public partnerships and a comprehensive master plan for the Luqa area.

Furthermore, student visas will be simplified for non-EU Students and the Malta Residency and Visa Programme will suggest changes to the law to make it more attractive, as well as exploring a visa action plan for foreign workers.


If you would like to know more about Malta’s budget plan this year and its influence on your industry, drop us a line by sending us an email on [email protected]

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