The Cost-of-Living Allowance for 2026 shall be that of €4.66 per week.

Partially with a view to addressing Malta’s low fertility rate, bonuses given on birth and adoption have been increased to €1,000 for the birth or adoption of the first child, €1,500 for the second child, and €2,000 for the third child or more.

Furthermore, the adoption reimbursement currently granted shall now be increased from €10,000 up to a maximum reimbursement of €12,000 for foreign adoptions, and a maximum of €2,000 for local adoptions, €500 of which shall be given as a grant.

Retirement, invalidity, widow and age pensions have been increased by €10 per week.

Government has meanwhile introduced increases to other pension related payments and allowances, some which include:

• widow pensions and an additional allowance to widowers who are still raising children;
• supplementary allowances;
• Cost-of-Living Bonus given to pensioners;
• Service pensions; amongst other benefits.

Discussions shall take place between Government and relevant stakeholders on the extension of Maternity, Paternity and Parental Leave, with Government intent on introducing additional leave for prospective parents. Neonatal Care Leave shall be introduced and shall be paid by the Government.

Parental Leave shall be extended to self-employed individuals, whilst said individuals shall also be entitled to Bereavement Leave and Miscarriage Leave going forward.

The leave donation concept currently applied in the public service for employees passing through difficult times, shall be extended to new parents. Government meanwhile intends to hold discussions to introduce this concept to the private sector.

The Minister ruled out any reduction in the standard rate of corporate income tax, instead stating that the Government will prioritise assisting businesses through various aid measures valued at around €50 million introduced in the budget.

Investment related to artificial intelligence, digitalisation, modernisation, automation and cybersecurity will benefit from an accelerated tax deduction over 2 years.

Businesses investing in research and innovation will benefit from a tax deduction of 175% on eligible expenditure.

An investment tax credit covering up to 60% of the value of an eligible investment undertaken over a 2-year period, will be made available over a 4 year period. This incentive is aimed at increasing productivity and value added, covering investment in machinery, tools, software and IT equipment, electronics and cybersecurity.

The Micro-Invest Scheme will be extended and widened to now include digital investments. The maximum tax credit available will be increased to €65,000, covering up to 65% of eligible expenditure.

The changes to the micro-invest scheme for Gozitan businesses will result in the maximum tax credit tax credit available increasing to €80,000, covering up to 85% of eligible expenditure when including the additional 20% bonus available to said businesses.

In order to incentivise wage increases in the private sector, a new wage component will be introduced as part of the micro-invest scheme which will see the Government co-finance up to 65% of the wage increase over 2 years for employees who have been employed with their employer for more than 4 years. This assistance will be capped at €780 per employee every year, while this will be capped €960 per employee per year for Gozitan businesses.

The various measures previously introduced to promote the intergenerational transfers of family businesses, succession planning and sustainable growth are being extended. These measures include the reduced rate of stamp duty of 1.5% on transfers of family businesses, grants for consultancy on governance and succession, amongst others.

The Minister indicated that the Government will be considering making improvements to the VAT legal framework in order to protect and incentivise growth in sectors which are high value adding, such as the Gaming industry.

The Business Development Scheme, Get Qualified and Higher Educational Qualifications tax credits will be extended throughout 2026.

The Government will be considering the establishment of a free zone logistics hub within the airport with the possibility of connecting this directly to the Freeport.

In 2026, Government will be commencing work on the initial stages of a major land reclamation project, which will involve reclaiming land outside of the Freeport. It is intended for this land to be used primarily by the maritime industry.

SMEs, including self-employed individuals will be able to benefit from a Government grant covering up to 50% of the purchase of an industrial garage from which they operate their business, which grant shall now be capped at €300,000.

The Government, through schemes administered by Malta Enterprise and the Malta Digital Innovation Authority, will be investing €100 million to incentivise and promote digitalisation and the adoption of technology such as artificial intelligence, the internet of things and cybersecurity amongst others.

In order to reduce bureaucracy for cooperatives, the requirement to submit audited accounts with their annual income tax return will be removed.

The Minister announced the creation of a National Academy of Aviation, in collaboration with private operators in the industry. This aims to provide specialised and accredited training linked with clear pathways to employment.

The environmental contribution levied on persons staying at holiday accommodation in Malta will increase from the current €0.50 to €1.50 per person for every night stayed at such accommodation.

Persons under the age of 30 who hold a valid driving licence will be eligible to surrender their driving licence and receive an annual €5,000 grant for 5 years.

Persons who wish to surrender their car driving licence and retain a motorcycle driving licence will be eligible for an annual grant of €1,500. It has not been made clear for how long this annual grant will be paid.

Furthermore, Government shall extend the grants on the purchase of electric vehicles in 2026.

Government will continue to operate schemes concerning the installation of: PV panels; batteries for storage of energy generated via renewables; water heaters; roof insulation and double glazing; water purifying systems; and also on the restoration of wells.