The top rate of tax for people earning up to €60,000 is being reduced from 32 per cent to 29 per cent as announced in the Budget programme last year, Finance Minister Edward Scicluna confirmed in the Budget speech this evening.
This, he said, applied to all computations, be they single, married and parents’. The measure would cost the government €13.2 million .
As previously announced, income from dividends received by individuals would continue to be taxed according to the old rates before the introduction of the marginal tax rate of 32 per cent.
Prof Scicluna said the government would also reduce income tax for middle income workers.
PARENTS
The tax band for parents with children in school would be widened from the current €9,300 to €9,800. As a result, parents would not pay tax on the first €9,800 of their income, saving €75 annually. The measure would cost the government €1.8 million.
Furthermore, Prof Scicluna said an adjustment was being made in the qualification of parents with children in that the maximum age of the children was being raised to 23 from the current 21.
PART-TIMERS
Prof Scicluna said the tax ceiling on part time work was being raised from the current €7,000 to €10,000, with the preferential rate of tax a 15 per cent.
The ceiling for self-employed part-timers would rise to €12,000.
Self-employed part-timers would also be able to employ up to two part-timers without losing their eligibility for the preferential tax rate.
NO TAX ON MINIMUM WAGE
No income tax would be charged on those earning the minimum wage, including pensioners whose income did not exceed the minimum wage.
Pensions doing part-time would would be eligible for the preferential rate of 15 per cent on their part-time work as long as their income did not exceed the income on which they paid social security contributions.
FOOTBALLERS
Footballers would have a preferential rate of 7.5 per cent on their income from the sport. Prof Scicluna said this measure had been discussed with the MFA.
TAX ON TRANSFERS AFTER AUCTIONS
Tax on transfers after auctions was being lifted.
INTEREST ON CAUSA MORTIS
Prof Scicluna said interest on duty from transfers causa mortis is being capped so as not to exceed the duty due.
15% WITHOLDING TAX ON RENTAL INCOME
Prof Scicluna said said landlords would be able to opt to have their rental income taxed at a final withholding tax of 15 per cent. The minister warned that enforcement in this sector would be strengthened. Non-declared rental income would be taxed at 15 per cent.