Source: Elli Touray & Janine Bernsdorf¸ PKF Malta
The 2012 Budget announced in Parliament on the 14 November includes measures with the aim of creating new jobs and consolidating economic growth. Furthermore the Parliament shall be collecting €2.5 billion in tax revenue and announced additional tax measures to enhance foreign direct investments in target sectors¸ the introduction of new tax benefits and new tax band applications to parents.
|INTERNATIONAL TAX MEASURES:
||LOCAL TAX MEASURES:
Expectations: In 2012¸ the Minister of Finance expects the Maltese economy to grow by 2.3%. The inflation rate was not steady throughout the year and registered an increase from 0.96% in October 2010 to 2.73% in September 2011. The Maltese economy is expected to hit the 2.1% growth rate the end of this year.
The government’s deficit for 2011 is expected to reach €181.7 million or 2.8% of GDP and therefore the expectations given in the last year’s budget can be seen as confirmed. The Parliament anticipated that the Government’s deficit will decrease to €153.9 million or 2.3% of GDP. The government debt is expected to be 70.14% of GDP.
GROSS DOMESTIC PRODUCT (GDP): The GDP for 2011 is expected to be €6.465 million. This corresponds to an increase of 4.9 %. The 2012 GDP is expected to reach €6.78b.
LABOUR MARKET | UNEMPLOYMENT: In the first quarter of 2011 the unemployment rate decreased by more than 2.5% (the average growth in the Euro Zone was 1%). The number of people registering for work recorded 6.212 or 6.6 % of the labour force.
FOREIGN TRADE AND BALANCE OF PAYMENTS: By September 2011¸ imports increased by 13.3% to €3¸526 million and exports also increased by 10.8% to €2¸245 million.
MANUFACTURING: In comparison to 2010¸ the total industry turnover during the period from January to July 2011 decreased by 5.7%
COST OF LIVING (COLA): The cost if liv