Issue link: https://maltatoday.uberflip.com/i/1301773
5 BUDGET2021 NEWS 22.10.2020 Extra Day Leave Workers get to enjoy a fourth day of leave as part of Labour's manifesto pledge to remove the 2005 law that removes public holidays when they fall on weekends. Workers will there- fore have 28 days of leave a year. Vouchers Government will hand out €50 mil- lion worth of vouchers. Each person aged 16 and over will receive €100 in vouchers. €60 will have to be spent on restaurants and €40 on other ser- vices and goods. Business initiatives Malta Enterprise will continue to strengthen initiatives related to start- ups, online selling, and schemes to strengthen innovation among com- panies that employ less than 50 peo- ple. New foreign investment schemes will also be announced. COLA Increase of €1.75 per week. Pen- sioners however are getting a total of €5 a week, an additional €3.25 No new taxes or increases in excise and duty is is historically Malta's fourth consecutive budget which includes no increase in personal income tax. VAT and excise taxes will also see no increase next year. Green Economy Climate change strategy to achieve low carbon society will be released. Green bonds to finance projects linked to environmental projects will be issued. Tourism ere will be an emphasis on re- building tourism with the aim of reaching a net carbon neutral sec- tor. Schemes to cover marketing and events. Air Malta Government has formally filed state aid application with European Com- mission to be able to give airline fi- nancial assistance. Gozo Existing schemes providing incen- tives for jobs in Gozo will be strength- ened. Emphasis will be placed on in- frastructural works and connectivity through a fast-ferry service. In-work benefit Higher thresholds will result in 4,500 new families receiving this benefit. New disability benefit Parents who stop from work be- cause of children with a disability and are currently entitled to a disability allowance will receive an additional benefit of €300 per year. Property tax Tax reductions on the sale and pur- chase of properties announced in mini-budget last summer will be ex- tended to promise of sale agreements signed until the end of March 2021, with a final contract due by end De- cember 2021. First time buyers e tax-free portion for first time property buyers will increase to €200,000 from €175,000. Book royalties Royalties on the sale of books will be taxed at flat 15%. VAT exempt VAT exempt threshold will increase to €30,000 from €20,000. Single-use plastics Importation of single-use plastics will stop next year and retail sales will end in 2022. EU funds EU COVID cash grant of €120 mil- lion will start coming Malta's way and this will be used to finance the wage supplement. Malta will also benefit from the EU's recovery programme to the tune of €220 million that will be project-based funds. Key measures affecting business and the economy €1,793,000,000 €1,087,000,000 €994,000,000 €599,002,000 €381,000,000 €344,000,000 Income tax The projection is €164 million more than what government expects to collect by the end of 2020 despite forgoing €16 million in tax refunds to all those earning less than €60,000. This year's tax refunds will be higher than previous years, with the maximum pay out increasing to €95 for those on the lower rungs. Social security National insurance contributions will yield €73 million more in 2021 than the revised estimates for this year, a sign of government's positive outlook that the economy will grow and employ more people. Customs and excise For the fourth budget running, the government has not increased excise taxes. However, increased economic activity is still expected to yield an additional €32 million over end-of-2020 estimates. Licenses, taxes and fines Reduced consumption on extraordinary expenses such as cars will yield €11 million less from motor vehicle registration tax and €4 million less in annual road licence fees. VAT The general VAT rate remains unchanged at 18%. The VAT exempt threshold will increase to €30,000. Government is projecting an increase of €184 million on the revised estimates for 2020, indicating that consumption will pick up. Non-tax revenue The bulk of this revenue is made up of EU grants to the tune of €263.5 million. Government is also estimating an income of €75 million from the IIP, an increase of €25 million over 2020. €1,897,540,000 €792,817,000 €758,174,000 €704,349,000 €195,645,000 €51,734,000 Social Solidarity The government's biggest spender will foot a bill of €1.9 billion for various social benefits. Expenditure on children's allowance will cost the country €44 million. The in-work benefit for the neediest will cost €9 million, an increase of €3.5 million. The country will spend €37 million more in retirement pensions. Capital investment Expenditure on capital projects is forecast to top €793 million in 2021 with government continuing with its major electoral pledge to invest in road projects. The capital projects fund for Gozo is €22 million. Health The health ministry has a wage bill of €331 million. Mental health services will have a budget of €55 million, an increase of more than €8 million. Medicines and surgical materials will cost €134 million. Education Wages in the education sector will cost €277 million. The spend on children's breakfast club will double to €1 million. Church schools will receive €112.5 million and €5.2 million have been allocated for private schools. Economy Pandemic assistance schemes will have a budget of €120 million, while €50 million in vouchers will be distributed to every person aged 16 and over to stimulate consumption. Gozo Expenditure on residential services for older people will increase to €4 million from €3 million. The Wild Birds Regulation Unit, which falls under this ministry will see its budget increase to €600,000 from €500,000. The Gozo Regional Development Authority will get €400,000. €756 million DEFICIT IN €5.2 billion Total revenue OUT €5.9 billion Total expenditure The government's income and expenditure in 2021