2016 Budget Highlights

October 13, 2015


COLA set to €1.75 per week

GDP growth for 2015 is at 4.2% while 3.6% growth is expected in 2016

Budget deficit of 1.6% expected for 2015, further reducing to 1.1% in 2016

Inflation rate currently stands at 1.0% and is expected to increase to 1.8%

Unemployment rate reduced to 5.8% in 2015 and is expected to decrease to 5.6% in 2016

Government debt as a percentage of GDP is at 66.56%


Entrepreneurs investing in Gozo and employing people for a minimum period of three years will be eligible to a refund of up to €5,000 per employee

The government will provide a subsidy for the wages of disabled employees of up to €125 per week, a refund of 25% of the wage paid and cover the social security contributions of such employees

Companies who fail to adhere to the rules on employment of disabled persons will be liable to a contribution of Eur1,600 per annum per employee

The 7.5% tax on income earned from sports will be extended to include players and coaches of all sports

Certain eco-contribution taxes to be substituted with excise taxes, with an aim to phasing out the eco-contribution by 1st September 2016

Excise tax on cement, tobacco, fuel and alcohol to be increased

Licenses for motor cycles and quad bikes fixed at €10 per annum

Individuals buying fuel efficient motor vehicles will benefit from a cash grant depending on the type of vehicle and Co2 emissions

The duty exemption for first-time buyers will be extended retrospectively from 1st July 2015

15% final withholding tax on rental income will be extended to commercial properties

Corporate group income tax consolidation to be introduced

Corporate donations in excess of €2,000 to MCCF to be allowed in full as a deduction for tax purposes, also a 150% deduction to be granted for donations to the arts

Malta Enterprise grants to be made available for start-ups and the development of small manufacturing plants

Tax credits to be made available for Research & Development and knowledge transfer activities

Micro-invest to be extended with a max €50,000 tax credit to be made available for female entrepreneurs


Reduction in VAT for sports activities e.g. gym memberships, fitness centres, football nurseries from 18% to 7%

Reduction in duty on the transfer of property in UCAs from 5% to 2.5%

Reduction in final withholding tax when a property is restored and sold in UCAs from 8% to 5%

10% initial deduction of capital expenditure and 2% annual wear and tear capital allowance to be extended to office buildings

Increase in tax deduction allowed for companies investing in electric vehicles from 125% to 150% of cost

An environmental contribution to be paid by tourists amounting to €0.50/night in Malta not exceeding a total of €5 per visit

Individuals in receipt of earnings or pension equal or less than the minimum wage will continue to be exempt from income tax

Single Tax Bands

0% – up to €9,100

15% – €9.100 up to €14,500

25% – 14, 501 up to 60,000

35%   over €60,000

Married Couples Tax Bands

0% –   up to €12,700

15% – €12,701 – €21,200

25% – €21,201 – €60,000

35%    over €60,000

Parent’s Tax Bands

0% –   up to €10,500

15% – €10,501 – €15,800

25% – €15801 – €60,000

30% – over €60,000

For further information you may wish to contact [email protected]