The terms of the budget presented on 11th July 2023 by the Chief Minister, Mr. Fabian Picardo, testify the resilience of the Rock confronted to an economically disrupted international environment.

Gibraltar's economy is dominated by four sectors of activity:

• Online gambling, which accounts for 28% of PIB and 12% of employment;
• Financial services accounting for 20% of PIB and 13% of employment;
• Tourism, accounting for 20% of PIB and 10% of employment; and
• Shipping, accounting for 10% of PIB and 5% of employment.

The Chief Minister confirmed that Gibraltar's PIB was growing at a rate of 7.5% from £2.55 billion in 2021/2022 to £2.74 billion forecast for 2022/2023. Gross business profits grew by 8.2% in 2021/2022, and income from employment increased by 7.3% over the same period. The estimated deficit for 2022/2023 is £5 million. Revenues were £90 million higher than forecast, reaching their highest level ever. Personal and corporate income tax exceeded forecasts by around £100 million. The Savings Bank now has a reserve of £67.5 million, which is expected to be well in excess of £70 million this financial year. The Community Care Charitable Trust has a reserve of £38 million.

Tax announcements for 2023/2024

Personal taxation

• Minimum wage to rise from £8.10 to £8.60 per hour
• Taxpayers with a taxable income of less than £100,000 per annum will benefit from a 1% reduction.
• The effective rate for anyone taxed under the Gross Income Based System and earning between £35,000 and £100,000 a year is reduced from 27% to 26%.
• The effective rate is reduced from 19% to 18% for those earning less than £25,000 a year.
• All income above £100,000 will continue to be taxed at 27% for a further year.

Student grants will increase by 15% from the next academic year.

Public sector pay

• Public sector employees with a basic salary of less than £50,000 will receive a tax-free lump sum grant of £1,200.
• Public sector employees whose basic salary is between £50,000 and £75,000 will receive a tax-free lump sum of £900.
• Public sector employees whose basic salary is between £75,000 and £100 will receive a tax-free lump sum of £600.

Private sector pay

Private sector employees will receive similar support in the form of tax-free payments up to the amounts and on the same terms as public sector workers. Such payments must be excluded from the salary declaration, and the deduction will not be allowed from the employer's profits.

Acquisition of property

• The allowance on stamp duty for the purchase of a first home is increased from £260,000 to £300,000.
• Stamp duty on purchases over £800,000 is increased from 3.5% to 4.5%.

Import duty

• A ceiling of £35,000 has been introduced for import duty on pleasure yachts.
• Import duty on bicycles and their accessories and spare parts, and on gymnastic or fitness equipment, will be reduced to zero.
• The import duty cap on petrol and diesel cars will rise from £25,000 to £35,000.
• Duty on tobacco will increase by £25 per carton (50 pence per carton or 5 pence per box of 20 cigarettes).

Private education

Parents who pay for their children to attend a public school in Gibraltar will now be able to deduct 10% of the cost of that education from their tax bill.

Sole practitioners

Sole practitioners will benefit from a tax credit, which will allow them to deduct from their tax 75% of the fees paid to the Gibraltar Law Society (LSRA).

Users of gyms and personal trainers

People who join a gym or use a personal trainer registered with the tax office will be able to deduct 10% of verified costs from their tax.

Corporation tax

No change to the rate of corporation tax, which remains at 12.5%.

Employment in Gibraltar

• Total employment increased from 30,403 jobs in October 2021 to 31,150 jobs in October 2022, a growth rate of over 2.5%.
• Average earnings in Gibraltar rose from £32,443 in October 2021 to £34,105 in October 2022, a growth rate of over 5.1%.
• During the 2nd quarter of 2023, 26 jobseekers were recorded.

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