At a virtual news conference, Minister of Finance and Labor Clyde Caruana explained how during the pandemic months, over a two-year period between 2020 and 2021, the additional expenditure of the government combined with the lack of revenue will amount to just over € 3.3 billion. This will mean that the blow to the country’s finances amounts to € 5 million a day.
Minister Caruana said that for the year 2020, in 2019 the government was predicting that our country would have a surplus of 1.4%. However, due to the impact of the pandemic, our country had a deficit of 10.1%. This was attributed to the fact that government revenue decreased, while the cost increased.
The most substantial expenditures were on Malta Enterpise schemes, which include the wage supplement with an expenditure of € 384 million, the health sector with an expenditure of € 74 million, the repatriation of people to and from Malta with an expenditure of € 50 million, as well as the voucher scheme which cost € 43 million.
On the other hand, government revenue for 2020 fell by € 846 million. Minister Caruana said that the biggest reduction in revenue comes from VAT, with a decrease of € 272 million, income from corporate profits with a decrease of € 273 million, stamp duty along with other taxes with a reduction of € 72 million, duty and excise with a reduction of € 63 million, as well as income related to workers’ income tax which decreased by € 40 million.
