Budget 2026: Titbits of income and expenditure

INCOME

Smokeless tobacco

This is ostensibly the first time that ‘smokeless tobacco’ has appeared as a line item under the product list on which excise duty will be charged. Smokeless tobacco is chewable or comes in pouches that are placed between the gums and the cheek. Government is projecting a revenue of €30,000 in 2026 from excise duties levies on smokeless tobacco products. The amount pales into insignificance when compared to the €97.3 million government is expecting to collect from cigarette duty. Electronic cigarettes and their refills will yield €300,000 next year, a decline of €200,000.

Petroleum

Government is estimating that excise duties on petroleum products will rake in €122.3 million next year, which surprisingly represents a reduction of almost €7 million on what the government is expecting to collect by the end of 2025.

Construction

The budget seems to suggest a slowdown in construction activity next year with the government forecasting income of €17.3 million from excise duties on cement, a decrease of €4.7 million over 2025. Excise duties on construction components and other fixtures are also expected to yield less—€1.4 million, which equates to a decline of €600,000.

Driving, cars and tyres

Income from car registration tax is expected to decline by €2 million to €32 million in 2026. Similarly, the government is estimating that income from the annual circulation licence fees will decline by €14 million to €86 million. However, government is also forecasting higher receipts from the excise duty on tyres. The estimates project an income of €2.3 million from the tyre tax, €400,000 more than last year.

Mobile telephony

People will not be calling less next year with the government expecting revenues to the tune of €5.8 million from excise taxes on mobile telephony services, an increase of €800,000.

Hotel licences and eco contribution

Income from hotel and catering establishment licences is expected to increase by €500,000 to €1.8 million. However, the environmental contribution paid by tourists, both domestic and foreign, when staying at hotels is expected to yield €21 million in 2026, an increase of €13.6 million over 2025. This significant increase was the result of a hike in the contribution from 50c per person per night to €1.50. The eco contribution is the only tax which was increased in the budget.

Gaming taxes

The gambling industry will contribute €67 million to public coffers next year, an increase of €2 million over 2025.

Stamp duty

Stamp duty on documents will yield €275 million in 2026, a whopping €20 million increase over 2025 despite no change in the tax levied.

Golden passport

There will be no income from the citizenship by exceptional merit scheme, better known as the golden passport, in 2026. The scheme had to be scrapped in its former incarnation after the European Court of Justice (ECJ) ruled earlier this year that it infringed EU law. The estimated income for 2025 was €30 million. Zero income is expected in 2026. Only a portion of the funds from the scheme used to be directed towards the annual budget with the bulk going into a national wealth fund.

EXPENDITURE

Public debt servicing

Public debt will rise to €12.5 billion next year, nonetheless, the ratio of debt to GDP will remain stable at 47.3% on the strength of a growing economy. However, the servicing of public debt will next year cost the country €1.3 billion, the first time this expenditure has surpassed the billion-euro mark.

LGBTIQ Hub

A new expenditure item within the Office of the Prime Minister is the creation of an LGBTIQ Hub with a budget allocation of €200,000 for 2026.

Cannabis education

The government that partially legalised cannabis is allocating €400,000 for what is being termed as cannabis educational reform next year. This expenditure is apart from the €1.1 million allocated to the Authority for the Responsible Use of Cannabis (ARUC).

Integration strategy

A budget of €500,000 is being allocated to implement the Integration Strategy and Action Plan (2025-2030) that was unveiled earlier this year.

Malta Vision 2050

A line item worth €4.5 million has been inserted within the budget of the Office of the Prime Minister under the heading Malta Vision 2050. This long-term vision document was launched for public consultation earlier this year and is expected to be finalised in the first quarter of 2026.

Stipends

The spend on post-secondary student stipends will increase by €6 million to €48 million next year, in line with a 15% increase across the board. Similarly, stipends for ITS students, which are listed as a separate line item in the estimates, will increase to €950,000.

Free Matsec exams

The allocated spend to cover free Matsec exams will remain unchanged at €2.5 million in 2026.

Schools outlay

The government subvention for church schools, which is the result of the church-state agreement of the 1990s, will top €165.4 million in 2026. What is billed as an Investment Fund For Private Schools will result in an expenditure of €4 million, while assistance to the Mariam Albatool School run by the Islamic Call Centre in Paola will be of €500,000. Meanwhile, the government will be allocating €110 million for the University of Malta, €71 million for MCAST and €12 million for the Junior College.

Rock music

The Culture Ministry has been allocated a €1 million budget for the organisation of a Rock Festival. This amount is €600,000 more than 2025. The Malta Biennale captained by Heritage Malta will have a budget of €2.4 million in 2026.

Children’s Allowance

The outlay on Children’s Allowance is expected to increase to €103 million in 2026, up from €89.7 this year. The government has increased the flat payment by €250 per child for those earning less than €30,000.

VAT lottery

A budget of €765,000 has been allotted for the fiscal receipts lottery, which is intended to encourage people to ask for a fiscal receipt when shopping.

Space policy

Malta may not have astronauts or spaceships but it still has a Space Policy under the aegis of Xjenza Malta, a government agency. Nonetheless, the budget for 2026 is allocating a spend of €400,000 for Space Policy and regulation.