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Overview of Budget 2018

Dated: [bxcode.pagedata.date]

Finance Minister Edward Scicluna presented the Government’s Budget for 2018 and reported the following:

  • Government financial surplus of €88m equivalent to 0.8% of GDP and forecast for 2018 is a surplus of 0.5% of GDP
  • Rate of inflation remain at 1.1% and estimated to be 1.5% for 2018
  • Rate of unemployment stood at 4.1%


Fiscal Measures

Income tax:-

  • Exemption from tax on the first €13,200 earned by pensioners
  • Tax credits for post graduate courses if eligible
  • Micro Invest Scheme has increased the value of assistance from €30,000 to €50,000 for Maltese businesses if such business is established in Gozo and/or has a female majority shareholder and/or female self-employed undertakings. The Scheme has also been extended to businesses which do not employ more than 50 full time workers.
  • Tax refund of between €40 - €68, depending on 2017 gross salary, to all employees in 2018.


The government has strengthened its fight against fiscal evasion by introducing an increase in penalties and further resources shall be granted to the Joint Employment Task Force to combat tax evasion.


  • Introduction of VAT Grouping for the regulated Financial Services and Gaming Sector, whereby through VAT grouping such legal entities being legally independent, having a fixed establishment in Malta and provide related economic and administrative activities, may opt to register as a single entity for VAT purposes. As a result, supplies between members of the same VAT group will be regarded as falling outside the scope of VAT.
  • The exemption threshold for annual turnover for those who opt not to charge VAT shall be increased from €14,000 to €20,000.
  • The possibility to submit VAT returns and Social Security Forms shall be made available also to entities having 10 or more employees.
  • The refund of VAT paid on the purchasing a bicycle shall be extended by a further year.
  • Vat rate for leasing bicycles shall be reduced to 7%.


Stamp Duty:-

  • Stamp duty exemption on the first €150,000 of the value of the immovable for first-time buyers is being extended a further year.
  • €3,000 refund on stamp duty for those who have sold their residence and are in the process of purchasing another residence, as long as such person does not own another property. This refund is extended to €5,000 for those persons who have special needs.
  • The scheme for the reduction from 5% to 2% for those purchasing property in Gozo is being extended for a further year.



  • Minimum retirement pension shall be increased by €2 per week
  • First €2,066 of a service pension shall not be taken into account when reducing the retirement pension
  • Contributions paid by pensions who remain working after pensionable age shall start to be taken into consideration as from the age of 65.
  • The re-issue of Savings Bonds for pensioners at better market interest rates.


Social Measures:-

  • Employees earning minimum wage for 1 year shall then be entitled to a weekly increase of €3 and after completing a second year in employment shall be entitled to a further weekly increase of €3 and an increase to €6 per week during the third year of employment and shall also be entitled to the increase in COLA.
  • MATSEC and SEC exam fees shall be reduced by half and removed completely the following year.
  • An €11 million allocation for the continuation of the fund created to assist for inequalities suffered by persons in the past
  • €50 million shall be used for the construction of circa 700 social housing units.
  • The thresholds, for those persons living in rented property which is subsidised by the government, shall be widened.
  • An increase of 200 applications for the scheme for property rented by Housing Authority to be allocated to persons in need of social housing.
  • The Housing Authority shall be offering financial assistance of €25,000 for the first 100 unutilised private properties when an application is made for the renovation and rehabilitation of such property, where such property on completion is rented to the Housing Authority at advantageous rates for a period of 10 years, for which the Housing Authority shall utilise such properties for housing purposes.
  • A grant of €300 to every person living in his/her own household and is 75 years old.
  • Installation of lifts to 109 blocks of government rented apartments.
  • Foster Care Allowance will increase to €100 from €70 per week.
  • Maximum Aid of €10,000 for expenses incurred for adopting foreign children.
  • As from 2018 widowers who work and receive a contributory pension at the same time shall be entitled to receive sickness benefits.
  • Orphans aged between 16 and 21 shall be entitled to an allowance even if they are in employment.
  • In-work benefit scheme shall increase from €350 to per child.
  • Community workers shall receive an increase of €200 per month.



  • Persons between 18 and 20 years old shall be granted a year of free public transport.
  • Free school transport for all children to be introduced in 2018/2019.
  • Various incentives shall be introduced to assist reducing traffic congestion
  • No registration tax on eco-friendly vehicles and no road licence shall be paid for the first 5 years.
  • Further extension to scrappage schemes
  • A grant of €10,000 will be awarded to those persons/companies investing in wheelchair accessible taxis.
  • Upgrade of bus shelters and roads.
  • Increase in accessibility in ferry terminals.

Contact Details

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Office: +356 2122 1030 | +356 2122 1130
Fax: +356 2122 1002

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