Tax revenues grow by €436 million in 2023 to €5.6 billion

Malta’s tax revenues grew by over €436 million in 2023, reaching a total of €5.59 billion – just over 85% of the state’s entire receipts that year.

Direct tax amount to over 45% of tax revenues at €2.5 billion, an increase of €194.5 million over 2022, mainly through personal income tax (€138.2m increase over 2022). Corporate tax increased by €41.3m to a total of €863m.

Receipts of €69 million from Malta’s sale of citizenship, formerly the Individual Investor Programme (IIP) have been reclassified as tax revenues.

Indirect taxes also showed notable changes, amounting to €1,978.3 million, an increase of €164.3 million when compared to 2022. This is equivalent to 35.4% of the total tax revenue. VATstood at €1,268.8 million, marking an increase of €79.3 million when compared to 2022. Taxes on products totalled €566.4 million, reflecting an increase of €52.8 million over the previous year. This increase can be attributable to higher tax revenue generated from duty on documents, and the tax registration on motor vehicles, which was partially offset by a decrease in gaming taxes and the excise tax levied on cement. Other taxes on production added up to €114.2 million, registering an increase of €30.7 million over the preceding year.

Social security contributions paid by employees, employers, as well as self- and non-employed persons accounted for 19.1% of the total tax revenue in 2023, amounting to €1 billion. This reflects an increase of €77.6 million when compared to the preceding year.

The overall tax burden – the total amount of taxes and social contributions, expressed as a percentage of GDP – decreased by 1.2 points to 27.1% of GDP, down from 28.3% in 2022. On average, the data shows a tax burden of 30.4% between 1995-2023, which implies a relatively consistent tax environment during these years, with values ranging from as low as 25.5% and as high as 34%.

By the end of last year, direct taxes constituted 12.3% of GDP, compared to the share of indirect taxes which was at 9.6%. Meanwhile, the share of social contributions was at 5.2% of GDP, reflecting a decrease of 0.3 percentage points compared to 2022.

Income tax and environmental tax

In 2023, household paid over half of the income tax collecte, 63.7% of the total, equivalent to €1.5 billion. Contributions from the non-financial and financial corporations accounted for 18.9% and 17.1%, respectively.

The increase of €180.8 million in income tax receipts over 2022 was primarily driven by higher receipts from households (€138.4 million), as well as increases in income tax receipts from financial corporations (€102.9 million). These increases were partially outweighed by decreases in income tax receipts from non-financial corporations (€58.6 million).

Total environmental tax revenue in 2023 went up by €28.2 million, reaching €315.5 million. This figure represents 5.6% of the total revenue collected from all taxes and social contributions, as well as 1.5% of GDP.

Energy taxes, including tax on transport fuels, were the largest share of environment taxes, which increased by €10.6 million, mainly due to higher revenue resulting from the emission trading permits (€9.4 million). This was followed by revenue generated from transport taxes at 41.1% and pollution taxes at 9.7%.