Finance Minister Clyde Caruana announced the extension of a previous scheme whereby the transfer of family businesses from parents to their children will be taxed at 1.5 per cent instead of five per cent.

The measure is aimed at helping the continuation of family businesses.

The government also announced measures to encourage entrepreneurs to invest in their business, including tax breaks on the amounts invested.

Caruana said businesses had already invested extensively to create more jobs. To help these groups of companies recover from the effects of the pandemic, the government was introducing a temporary scheme whereby they can benefit from capital allowances on amounts invested during the pandemic.

He said the groups of companies that had capital allowances not used in the years 2020 and 2021 due to losses incurred in the pandemic can apply to this tax deduction against any taxable income from other companies, which are part of the same group, for 2021.

Malta Enterprise will next year introduce a scheme whereby a percentage of the profits held in the business which are invested in eligible projects in the same business or another business will receive a tax benefit provided that the investment is made within two years from 1 January 2022.

The government will also introduce fiscal incentives to continue supporting more innovative, green and digital investments by businesses as well as investments in the social field.

To help businesses go digital and green, the government was providing financial assistance toward more sustainable operations. Those who made losses will be assisted through scheme like ReStart while start-ups will continue receiving assistance from Malta Enterprise.

The government will invest €470 million to modernise industrial areas through the creation of more industrial space without taking up more ODZ land. The Life Sciences Park, Kordin Business Incubation Center (KBIC), and the industrial estates of Ħal Far, Bulebel, Marsa, Kordin, San Ġwann and Luqa will be among those that will see part of this substantial investment, he said.

Mitigating rising international transport prices

The government will extend the rental subsidy to a larger number of eligible businesses to alleviate the increasing costs faced by importers and businesses due to the international increase in transport prices.