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Malta: tax burden +29,6%

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Malta_tax_burden_296.jpgIn 2022, total tax revenue stood at €5,098.7 million, indicating a tax burden equivalent to 29.6 per cent. 

Tax revenues increased by €503.2 million over the previous year, reaching a total of €5,098.7 million. This figure represents 86.7 percent of the total revenues collected by the general public sector in 2022. Direct taxes amounted to €2,285.2 million, making up 44.8 per cent of the overall tax revenue. This marked an increase of €203.2 million compared to 2021. The primary component within this category remains the Personal Income Tax, which rose by €232.8 million, while Corporate Income Tax, on the contrary, dropped by €38.3 million over the previous year.

Indirect taxes amounted to €1,822.8 million, an increase of €224.2 million when compared to 2021. This is equivalent to 35.8 per cent of the total tax revenue. Within this category, Value Added Tax stood at €1,189.5 million, marking an increase of €188.8 million when compared to 2021. Moreover, Taxes on Products totalled €513.5 million, reflecting an increase of €14.4 million over the previous year. This increase can be attributable to higher tax revenue generated from duty on documents and the consumption of cigarettes, which was partially offset by a decrease in the excise tax levied on petroleum. Other taxes on production added up to €92.4 million, registering an increase of €15.4 million over the preceding year.

Social contributions paid by employees, employers, as well as self- and non-employed persons accounted for 19.4 per cent of the total tax revenue in 2022, amounting to €990.6 million. This reflects an increase of €75.8 million when compared to the preceding year.

The overall tax burden represents the total amount of taxes and social contributions, expressed as a percentage of Gross Domestic Product (GDP). In 2022, Malta’s total tax burden went down to 29.6 per cent of GDP, down from the 30.1 per cent of GDP reported in 2021. The data shows an average tax burden of approximately 30.6 per cent for the period between 1995 and 2022. This implies a relatively consistent tax environment during these years, with variations around this average, including values ranging from as low as 25.5 per cent and as high as 34.0 per cent.

Overall tax burden by year

By the end of last year, direct taxes (which include Capital taxes) constituted 13.3 per cent of GDP, compared to the share of indirect taxes which was 10.6 per cent. Meanwhile, the share of social contributions stood at 5.8 per cent of GDP, reflecting a decrease of 0.2 percentage points compared to 2021.

The evolution of the main tax components in Malta

Income Tax receipts by ESA 2010 institutional sector.

In 2022, the income tax collected by the General Government from the household sector accounted for 65.8 per cent of the total, which is equivalent to €1,440.2 million, Meanwhile, contributions from the Non-Financial and Financial corporations accounted for 24.2 per cent and 9.6 per cent, respectively. In absolute terms, the increase of €196.2 million in income tax receipts over 2021 was primarily driven by higher receipts from Households (€233.5 million), as well as increases in income tax receipts from Non-Financial Corporations (€80.8 million). These increases were partially outweighed by decreases in income tax receipts from Financial Corporations (€118.8m).

Environmental taxes.

Total environmental tax revenue in 2022 went up by €10.6 million, reaching €287.2 million. This figure represents 5.6 per cent of the total revenue collected from all taxes and social contributions, as well as 1.7 per cent of GDP. Energy taxes (which include taxes on transport fuels) increased by €7.0 million, and constituted the largest share of environment taxes, making up 50.3 per cent of this category. The primary reason behind this increase can be attributed to higher revenue resulting from the emission trading permits (+€15.0 million). This was followed by revenue generated from Transport taxes at 38.6 per cent and Pollution taxes at 11.1 per cent.






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