Malta’s Tax Burden Rises Despite Government Claims of No New Taxes

New data released by the National Statistics Office (NSO) has revealed that Maltese taxpayers are shouldering a significantly heavier tax burden compared to five years ago, contradicting the government’s repeated claims that no new taxes have been introduced.

The figures, published just one day after the Budget presentation, show that Malta’s tax burden has reached 29.3 percent of GDP in 2024—a sharp increase of 2.6 percentage points from 2023 alone. Since Prime Minister Robert Abela took office, the overall tax burden has climbed by one percentage point, despite the implementation of various incentives allegedly designed to ease financial pressure on certain population groups.

In 2019, the year before Abela assumed leadership, Malta’s tax burden stood at 28.5 percent. The upward trajectory raises questions about the government’s fiscal policy and transparency regarding taxation.

While the government has successfully boosted its tax revenue, this fiscal achievement doesn’t necessarily translate to improved household finances for Maltese residents. The NSO data indicates that although wages have increased, both direct taxes (like income tax) and indirect taxes (such as VAT) are consuming a growing proportion of people’s earnings.

Much of this additional tax revenue appears to be driven by Malta’s expanding population, particularly the influx of approximately 160,000 foreign workers. This demographic shift has stimulated domestic demand and retail activity, generating more tax revenue without necessarily requiring new tax measures.

In concrete terms, the government collected €6.7 billion in taxes in 2024, representing a substantial increase of €1.1 billion compared to 2023. Direct taxes, primarily income tax, accounted for nearly €1 billion of this increase—a figure that highlights the growing pressure on workers’ incomes.

The rising tax burden is particularly noteworthy given Malta’s economic context. As a small island economy heavily dependent on services, tourism, and foreign investment, changes in taxation can have outsized effects on competitiveness and household financial security. The government has long promoted Malta as a business-friendly destination with attractive tax incentives, making the increasing burden on ordinary taxpayers a potentially sensitive political issue.

For individual Maltese taxpayers, this growing tax burden has real-world implications. It determines how much of their earnings they actually retain and can spend, directly influencing their disposable income and standard of living. A higher percentage of income going to the government means less money available for savings, investments, or discretionary spending.

The government may argue that increased tax revenue enables greater investment in public services, infrastructure, and social programs. However, for many households feeling the pinch of rising costs across multiple sectors, the promise of better public services may offer little consolation against the immediate reality of tighter personal finances.

Economic analysts suggest that this trend raises questions about fiscal sustainability and the distribution of economic growth benefits. While Malta has experienced relatively strong economic growth in recent years, the increasing tax burden indicates that a substantial portion of this prosperity is being channeled to government coffers rather than remaining with the citizens who generated it.

As the Maltese economy continues to evolve, the balance between necessary taxation to fund public services and maintaining competitive advantages will remain a critical challenge for policymakers—one that will likely feature prominently in future political debates as taxpayers become increasingly aware of their growing contribution to state finances.