Budget 2024: No change in income tax rates, refund cheques to stay

Finance Minister Clyde Caruana confirmed that there will be no tax cuts next year, pointing to the energy subsidies already in place, which he said were already a large burden on the public purse.

In his budget speech on Monday evening, Caruana announced that tax refunds, which cost over €26 million last year, will be repeated in 2024, using the same rates used in 2023.

Tax refund cheques of values of between €60 and €140 are to be distributed, with the highest amounts being allocated to those with low incomes. Caruana said he wanted to pre-empt “the annual spin by the Opposition” and insisted that this was not a refund of tax paid, but “a grant rewarding participation in the labour market.” Over 250,000 persons are to receive such cheques, he said, at a total cost to the taxpayer of €26 million.

The untaxed portion of additional income earned by pensioners who are still active in the workforce is to increase by 20% to 60%.

Reductions to tax rates on part-time work and overtime were also announced, although no details as to the actual rates were provided.

The 7.5% tax rate currently enjoyed by sportspersons, coaches and athletes is to be extended to other persons employed in sporting activities in a bid to encourage more people to choose a career in sports.

On the International Taxation front, Caruana announced that Malta would be opting to delay its implementation of the European Directive establishing a minimum global tax rate on companies that form part of multinational groups earning over €750 million or more every year.

This means that Malta will not be introducing a top-up tax that would bring the effective tax rate up to the Organisation for Economic Co-operation and Development (OECD) mandated rate of 15%.

The reason for this, Caruana said, is to allow Malta to take any actions necessitated by global developments. The current corporate taxation system, known as the full imputation system, whereby corporate profits are taxed at the rate of 35%, but which up to 30% can be reclaimed, is to remain in force.