Issue link: https://maltatoday.uberflip.com/i/1510683
11 maltatoday | TUESDAY • 31 OCTOBER 2023 BUDGET2024 Children's allowance to increase by €250 Tax refund cheques to remain unchanged; no tax cut contemplated Stipends to increase by €64 CHILDREN'S ALLOWANCE TAX REFUND KARL AZZOPARDI CHILDREN'S allowance will increase by €250 for every child in what is arguably the strongest social measure in the budget. It will take government spending on children's allow- ance to €15.5 million for 62,000 boys and girls. Government had pledged to increase the allowance by €90 per child per year and the first such increase hap- pened in 2023. However, for 2024, the increase was tri- pled in a measure to alleviate the financial burden for families with children. The Finance Minister said that in specific cases, par- ents with low income will continue to receive a chil- dren's allowance until their child reaches 18 years of age as long as they continue in full-time education. "When the time comes for eligibility for the Child Al- lowance to end, parents will become eligible for a Spe- cial Allowance when their children continue their full- time education. This Special Allowance will amount to €500 per year for three years, as long as the children continue to live with their parents and remain full-time students," Caruana said. 4,800 families are expected to benefit from the meas- ure in the first year, with the number shooting up to 15,000 in three years' time. It will cost €7.5 million. Child bonus In 2020, government had introduced a bonus for every child born or adopted. The amount will increase to €500 for the first child, and to €1,000 for the second child and subsequent chil- dren, up from the previous amount of €400. Around 3,200 family will benefit from the measure. Government spending on children's allowance will increase to €15.5 million MAT THEW AGIUS INCOME tax rates are to remain unchanged in 2024 with the Fi- nance Minister ruling out any tax cut given the hefty burden on the public purse from the energy susbidy. However, the tax refunds, which cost over €26 million in 2023, will be repeated again next year with no change in the amounts people will receive. Tax refund cheques of values between €60 and €140 are to be distributed, with the high- est amounts being allocated to those with low incomes. Carua- na said he wanted to pre-empt "the annual spin by the Opposi- tion" and insisted this was not a refund of tax paid, but "a grant rewarding participation in the labour market." Over 250,000 persons are to re- ceive such cheques, he said, at a total cost to the taxpayer of €26 million. The untaxed portion of addi- tional income earned by pen- sioners 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 en- joyed by sportspersons, coaches and athletes is to be extended to other persons employed in sporting activities in a bid to en- courage 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 Eu- ropean Directive establishing a minimum global tax rate on com- panies that form part of multina- tional 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 Eco- nomic Co-operation and Devel- opment (OECD) mandated rate of 15%. The reason for this, Caruana said, is to allow Malta to take any actions necessitated by global developments. The cur- rent corporate taxation system, known as the full imputation system, whereby corporate prof- its are taxed at the rate of 35%, but which up to 30% can be re- claimed, is to remain in force. STUDENT stipends will increase by €64 next year; a pro-rata to in- crease based on the cost of living. Clyde Caruana said govern- ment will be substantially in- creasing the stipends of specif- ic courses. "We are addressing the need for more trained individu- als in crucial sectors for our country's economic transition, as well as in vital areas where the country faces shortages, such as primary level teachers or teachers in scientific and mathematical studies," he said. The government will also maintain its provision of tax credits for students who wish to further their studies at the Masters and Doctorate levels via the Get Qualified and High- er Educational Qualifications programs. Over 250,000 persons are to receive tax refund cheques, at a total cost to the taxpayer of €26 million