Labour pledges 175% tax credit for research and innovation investments

The Labour Party has pledged a 175 per cent tax credit for research and innovation (R&I) expenses incurred by all businesses.

Prime Minister Robert Abela issued a set of new proposals regarding businesses on Friday.

In another pledge, the Prime Minister said that a Labour Government would continue to drive the digital transformation by granting a 60 per cent tax credit on digital investment.

Dr Abela said that the PL manifesto’s economic plan will lead to five clear goals: achieving average economic growth of 4 per cent per year; placing Malta among the top five countries in the EU for wealth creation per person; maintaining one of the lowest unemployment rates in the Eurozone; ensuring that more than two-thirds of economic growth is generated by high value-added sectors; and positioning Malta among the most advanced countries in the European Innovation Scoreboard.

He pledged that the annual investment of €100 million for digitalisation and the adoption of technology will continue to be supported year after year.

The Prime Minister said that Malta has the potential to become a digital base for international entrepreneurs who want to establish and run a business in Europe digitally.

In this context, he announced that through the Malta eResidency programme, foreign entrepreneurs will be able to set up a company in Malta digitally.

He said that this initiative will attract more start-ups and small companies, while also creating demand for professional services and generating new income without increasing pressure on infrastructure and land use.

Regarding the gaming sector, the Prime Minister said that within two years, eight projects in this sector will be supported through an investment of €60 million, and together they are expected to create 1,300 new jobs, “almost a 10 per cent increase in careers within this sector.”

Dr Abela also announced that an e-sports centre will be established, while the powers of the Malta Gaming Authority will be expanded so that it can also license working studios that produce narrative-driven games, e-sports platforms, immersive virtual content, and prediction markets.

He announced that a new regulatory framework will be created to make Malta “a leading jurisdiction” for Web3 innovation.”

In addition, an Innovation Hub will be established for businesses operating in renewable energy, food technology, pharmaceuticals, smart manufacturing, additive manufacturing, med-tech, and microelectronics, he said.

Lastly, the Prime Minister also pledged that a cash rebate scheme will be launched through which local artists will be able to benefit from a 10 per cent reimbursement on their expenses, up to a maximum of €50,000.