Abela pledges 175% tax credit for innovation-related investments

Updated 12.50pm

A re-elected Labour government will offer companies that spend money on research and innovation-related investments a 175 per cent tax credit, Robert Abela pledged on Friday. 

The tax credit would mean that for every €100 a business invests in research and digital innovation, it will pay €175 less in tax. 

Labour is also pledging a 60 per cent tax credit for businesses that invest in new tech, innovation and AI, with €120m allocated to this pledge, Abela said.

The prime minister and Labour leader was speaking at a press conference held in Ta' Qali which focused on the party's economic targets and efforts to help business owners.  

Abela said those targets include averaging 4 per cent GDP growth per year, rising to the top five EU economies in terms of GDP per capita, keeping unemployment levels at 3 per cent, and reaching the EU median on innovation. 

The PL also wants to ensure that two-thirds of GDP growth in Malta is sourced from the digital sector, services, and manufacturing. 

He said Labour's offer of tax credits to encourage business innovation were geared towards reaching those targets. 

Labour would expand the Malta Gaming Authority's remit to allow it to licence a broader spectrum of companies, including those that operate in prediction markets.

Prediction market websites like Polymarket allow people to place bets on everyday events- such as the Maltese general election.

He also promised to add 1,300 jobs in the gaming and Esports sectors in the next five years. Currently, there are 14,000 workers in the industry.

The Prime Minister also reiterated pledges that his party has already made, including a tax cut for SMEs from 35 per cent to 25 per cent, effectively reducing national insurance contributions for self-employed to 10 per cent, a tax break for hotels that invest in their product, and a grant for restaurants that spend money on having a better service and quality.