Malta Budget 2025 Highlights

Malta’s employment increased by 6.1% in 2023 while it is expected to increase by 4.6% and 4.1% in 2024 and 2025 respectively. Inflation, on the other hand, is estimated to fall to 2.5% in 2024 and 2.1% in 2025. While the deficit is currently higher than the 3% EU threshold, this is expected to decrease to 4.0% in 2024 and continue decreasing to 2.6% by 2027. Notwithstanding this deficit, debt as a percentage of GDP is expected to close at 49.5% in 2024 and 50.1% in 2025. The Government will continue to subsidise prices of energy fuels, grains, and animal feed.

The cost of living adjustment (COLA) for 2025 has been set at €5.24 per week (€12.81 in 2024) and the national minimum wage, which remains untaxed, will increase to €221.78 weekly (€213.54 in 2024). 

• 2 years’ social security credits to persons who successfully complete a drug rehabilitation programme and engage in employment.
• Increase in the pension of persons with disability who retire from work to compensate for the loss of disability allowance following retirement and ensure that the pension reaches national minimum wage.
• Increase in a number of disability benefits and carers’ grants.
• Tax credit available to parents of disabled children who require specialised therapy to increase by €250 to €750.  Unemployed parents or parents who are entitled to social benefits shall become entitled to this tax credit.
• The maximum deduction allowed to parents for school fees paid in respect of their children attending a private school will increase to €3,500 for kindergarten (previously €1,600), €4,600 for primary schools (previously €1,900) and €6,500 for secondary schools (previously €2,600).
• Government shall be fully subsidising the first six months of a gym membership for youths born in 2005, 2006 and 2007. 

• Incentives will be introduced for non-commercial farmers who lease agricultural land from the Government to enter into arrangements with commercial farmers to work their land.
• An authority for food safety will be established as the sole regulator in this field and to have an authority that is responsible for food safety in case of crisis.
• Fiscal incentives to food producers and sellers will be introduced to reduce food waste.
• Investment in the infrastructure will be undertaken to sustain the fishing industry and aid will be provided to decrease pollution and environmental impact.
• Digitalisation in the fisheries and aquaculture sector will be improved by a €4 million project funded by EU funds.
• Excise duty on beer with low alcohol content produced by small and independent breweries in Malta and on small wine producers will be reduced.

• Schemes will continue to be provided with the aim of encouraging investment in residential renewable energy systems, including the installation of PV panels, home energy storage batteries, heat pump water heaters and solar water heaters as well as water purifying systems. The government will also continue to incentivise the private sector to develop renewable energy installations.
• The strategic vision for clean energy is developing and includes (i) the implementation of the second interconnector, (ii) investment for mass energy storage using batteries, (iii) a national policy for renewable energy projects and (iv) a preliminary consultation to gauge market preparedness.
• Following the identification of 6 zones for potential renewable energy projects, a Strategic Environmental Assessment identified 2 zones where such projects would have a lesser environmental impact.
• Offshore floating wind farms and nearshore solar energy solutions are being considered.
• The scheme incentivising the purchase of new electric vehicles will be extended, with the grant amounting to a maximum of €2,000 for new motorcycles and €8,000 for new vehicles and small vans.
• Other schemes incentivising the switch to environmentally friendly vehicles will be extended, including incentives for the purchase of electric bikes, pedelecs and ekickscooters, the vehicle scrappage scheme, and the grant for conversion to LPG power or electrically powered vehicles.
• Electric vehicles and plug-in hybrids with an electric range of not less than 50km will continue to benefit from an exemption from registration tax and an exemption from the annual road license fee for a period of 5 years from the date of first registration.
• A national strategy on cycling as an alternative means of transport will be published.
• The Government will invest in an Intelligent Traffic Management System.
• Investment in high quality water supply in compliance with European Directives is being made in terms of a national plan with a value of €310 million over 10 years.
• Works will commence shortly on a new waste management facility for the separation of mixed bulky waste.

• Allocation of €25 million for more than 50 Public Social Partnerships.
• One stop shop to be inaugurated in the south of Malta to provide the necessary resources, research and training in the voluntary sector.
• A maximum tax credit of €500 on donations made by enterprises to NGOs operating in the social, environmental and animal welfare sector.

• Malta’s Vision 2050 will be launched in Q4 2025, setting the country’s strategic direction. It shall address challenges like climate change, tech advancements, demographic shifts, and global economic dynamics, while acting as a plan for Malta’s development in different sectors.
• A public consultation on the Economic Migration Policy will be opened by Q4 of 2024.
• Law relating to “Equal Pay for Work of Equal Value” to be introduced in 2025.
• It appears that the tax refunds for persons earning less than €60,000 will be issued again this year, with the refunds ranging from €60 to €140, depending upon the level of income.
• The Government plans to establish a Commercial Court, reflecting the specialisation efforts in the judicial system.
• Women’s sanitary products will be subject to a 0% VAT rate. This 0% VAT rate will also extend to medical accessories used in the treatment of cancer affecting women.

The information contained in this publication is based on the 2025 Budget Speech, during which the Minister for Finance announced, amongst others, measures that may require the passing of legal instruments for them to be effective. The details of the measures would typically be known at point of publication of such instruments or related guidelines. Readers affected by any announced measure should seek professional advice specific to their facts and circumstances and not rely on this publication.