Low-income earners and pensioners are set to benefit in Budget 2016 as the Finance Ministry enters its last phase of preparations.

Details of how this will be done are still being worked out, sources said, but pressure has been building on the government to address these categories unaffected by income tax cuts and child-related measures.

A token measure adopted last year was a one-off bonus of €35 to those who did not benefit from the widening of the 25 per cent income tax band.

But sources said what is being considered for next year is a permanent improvement for low income earners and pensioners.

The government is unlikely to heed calls or an increase in the minimum wage above cost of living adjustment

However, the government is unlikely to heed calls from certain quarters for an increase in the minimum wage above the cost of living adjustment, to avoid endangering competitiveness.

The Global Competitiveness Index released by the World Economic Forum last week saw Malta slip one place with the top-rated stumbling block being public sector bureaucracy.

Joseph Muscat has gone on record saying the Budget would not contain any surprises with sources pointing out that it would follow the trend of the last two Budgets that included a mix of measures aimed at incentivising work and leaving more money in people’s pockets.

The Budget will be presented on October 12 when Finance Minister Edward Scicluna will also give a review of this year’s performance.

The headline figures for 2015 are expected to spell good news for the government. Bolstered by strong economic growth, the deficit is likely to hit the 1.6 per cent target, down from 2.1 per cent last year.

But Prof. Scicluna is also likely to give an update of the impact measures introduced over the past two years have had on employment. The free child care service, aimed at boosting female participation in the workforce, would have been functioning for a full year.

He is also expected to report on the outcome of the system to taper benefits rather than remove them completely for the unemployed and single mothers if they find work.

Last year, excise taxes increased across the board as did certain licence fees, to mitigate against lost revenue and higher expenditure. It is unclear whether excise taxes will again be raised in a similar fashion.

The Sunday Times of Malta looked at some of Budget 2015’s salient measures to find out when they were implemented.

Income tax

• Twenty-five per cent tax brackets: This was the third and final instalment of a phased-in approach to ensure that those earning less than €60,000 pay a top rate of 25 per cent as opposed to 35 per cent. Introduced in January.

• Waterpolo players: A 7.5 per cent preferential part-time tax rate for waterpolo players was introduced. It followed a similar measure for footballers introduced in 2014.

• Transport credit: A tax credit of €150 for parents with children in private schools who use school transport was introduced. Impact will be felt next year when tax returns for 2015 are due.

• Bonus: Employees not benefitting from the changes in income tax brackets received a one-time, non-taxable bonus of €35. This was paid out in March.

Social measures

• Benefits: In-work benefits for workers with low income and a child supplement linked to conditions on upbringing started being paid out.

• Maternity fund: A fund to which all employers have to contribute was introduced in August. The fund will refund employers for maternity payments made to their workers.

• Pensioner bonus: In March pensioners, mainly women, who had worked for a brief period in the past but did not collect enough national insurance contributions to receive a pension received an annual bonus of either €100 or €200, depending on the time they worked.

VAT

• VAT registration: As from January individuals with a turnover below €7,000 had to register with the VAT department after the government repealed a 2011 legal notice that had exempted them from the requirement.

Eco-contribution: This was removed on September 1 and replaced by a waste disposal scheme for household white goods and electronics.

Ex-gratia refund: The refund of VAT paid on car registration tax between 2004 and 2008 was paid after the summer for those cases going back to 2004.

Excise tax and licences

• Cigarettes etc: Upward revisions in excise taxes on cigarettes, tobacco, fuel, cement and mobile telephony kicked in immediately.

• Cars: Higher licence fees for cars registered on or after 1 January 2009 with CO2 emission rates exceeding 100g/km were introduced in January.

Stamp duty

• Insurance policies: From January the stamp duty on insurance policies was increased with the minimum charge going up to €13 from €11.65.

• First-time buyers: The stamp duty exemption on the first €150,000 for first-time property buyers was extended to June.

Other

• Ship casinos: In April cruise liners staying overnight were allowed to open onboard casinos for passengers while in port against the payment of a fee.

• UN retirees: In June tax rules were changed to give preferential treatment to retired UN diplomats in a bid to attract them to Malta.

• Islamic banking: A pledge to change the law and enable the introduction of Islamic banking was not fulfilled but a consultation document was released by the Malta Financial Services Authority.