Detail Of Maltese Budget Released

by Robert Lee, Tax-News.com, London

27 November 2002

Presenting his latest budget on Monday, Malta's Finance Minister, John Dalli painted an optimistic picture of the state of the Maltese economy, and referred to 2003 as the jurisdiction's 'year of destiny'.

'Our economic forecast for next year is realistic within the global circumstances and uncertainties that are still around us. As soon as a positive decision is taken by the people regarding membership of the (European) Union and the reaffirmation that, in the coming years, we will have a Government that will respect this decision, then confidence and certainties necessary for the creation of investment, employment and wealth will be re-established,' he announced.

Government receipts for 2003 are expected to come in at Lm771 million, an increase of Lm24 million on this year, due partly to a projected increase in income from the Customs and Excise and VAT departments, and partly to elevated levels of non-repeatable receipts.

Mr Dalli predicted a GDP increase of 2.8% in real terms, with an increase in investments of around 4.6% over the next year. He also announced that the government will, in 2003, receive some 18.5 million euros, or Lm7.5 million from the European Union in pre-accession aid.

'This will be used to build our administrative capacity in various areas so that the services will be of the same level (as) those provided to citizens of member states,' he explained.

Plans for 2003 outlined in what is widely expected to be the last budget before the general election included: an increase in excise duty on tobacco products, adjustments to certain rates of vehicle registration tax, the continuation of the dismantling of levies on certain industrial products, and adjustments to the minimum amount of tax payable by foreigners living in Malta.

The Maltese Finance Minister went on to reveal that negotiations are still in progress with the European Commission over VAT.

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