Monday 22 October 2018 marked the presentation of the 2019 budget of this government aimed at stimulating economic growth, reducing government debt and delivering a budget surplus year on year.
The Budget 2019 will maintain the momentum of Malta’s economic growth, with the financial surplus projected to reach 1.3%, or 0.5% if one excludes the Individual Investor Programme.
Finance Minister Edward Scicluna said when delivering the Budget speech that the country’s debt-to-GDP is projected to drop to 43% next year. Economic growth in real terms will be around 5.3%, reaching €12.9 billion (nominal). That is almost double his first budget in 2013.
Recurrent revenue is next year projected to rise by 8.4%, reaching €5 billion. Revenue from tax alone is projected to increase by 8.5% on the back of economic growth. Expenditure next year will be €4.98 billion, up 8% on this year.
In 2019 capital expenditure is expected to rise by 26% to €662 million. Employment is projected to grow by 3.7% while unemployment is estimated to be 4.3%. Inflation is projected at 1.9%.
Looking at small and medium-size businesses and self employed, of key interest is the reduction in the rate of duty on ‘Intra-Family’ transfers from 5% to 1.5% facilitating the transfer of family businesses, which incentive has been extended for another year. The preferred duty rate of 1.5% can be applied on the transfer of properties used for conducting business activities and which has been used for commercial purposes for the last three years or more. It can also be applied for intra-family donations of company shares and other types of marketable securities.
Self-employed people forced to shut down their business will be eligible for unemployment benefit.
A plan of action to help start-ups grow will be another of the government’s aims. A start-up accelerator/hub will be introduced in order to attract international companies.
Government is also expected to publish a feasibility study on a regulatory framework for disruptive technologies like Artificial Intelligence, the Internet of Things and other technologies which complement blockchain.
A new agency, Tech.mt, will be set up to promote Malta as a destination for such disruptive technologies.
Contact us to better understand the impact of the 2019 budget on your business and how to capatilise on Malta’s economic scenario.