Tax contribution of foreign workers doubles in five years

Foreign workers in Malta contributed over €100 million in tax payments, according to latest data presented in the House of Representatives.

The data from the finance ministry shows that tax receipts from foreign workers doubled over five years, from €51 million in 2011, to €100.6 million in 2016.

A recent parliamentary question revealed that there were 37,717 foreign workers registered in Malta up to March 2017. That would suggest a tax contribution of €2,650 per capita.

Of these foreign workers, 27,334 hailed from EU member states, while 10,383 were from non-EU member states.

In 2013 the number of foreign workers in Malta totalled 15,094, of which 9,670 were EU workers while the rest, 5,424, were from non-EU states. According to NSO data, in March 2017 there was a total of 187,977 people in full-time employment and 34,858 who held down a part-time job as their main employment. That would indicate that foreign workers constitute around 17% of the total workforce in Malta.

An analysis of foreign migration to Malta by the Central Bank carried out in 2016 had suggested it was hard to understand the effect on wages of the large influx of the last years.

“In certain sectors, such as financial services, information and communication, real estate and professional and administrative support services, a large net inflow of foreigners between 2010 and 2014 has coincided with a significant rise in wage growth. Conversely, there is evidence that in some sectors which faced less buoyant conditions and where most growth in employment was among foreigners – in construction and tourism – wage developments were quite muted.”

The Central Bank said that tax data indicated that while in 2000, revenue from foreign workers accounted for just 2.4% of personal income tax and national insurance contributions, by 2014 this share had risen to 10.1%.

“The amount of direct tax revenue collected from foreign workers increased by nine times during the period 2000 to 2014, whereas that from Maltese workers doubled.”

The Central Bank also said that migrants also do not appear to be weighing down on the social benefit budget – in 2016 there were just 130 on unemployment benefits, for instance.

“This suggests that in addition to their significant contribution towards economic growth, foreign workers have also contributed significantly to improve the state of public finances in Malta.”