Super bonus drove higher tourist tax increase

The government initially planned to increase Malta’s eco-contribution to around €5 or €6, but the tax was raised further in Budget 2027 to fund the Labour Party’s super bonus pledge in full, sources have told MaltaToday. 

During a meeting with the Malta Hotels and Restaurants Association (MHRA), hoteliers and accommodation representatives were told that the eco-contribution would only rise to around €5 or €6.  

Behind the scenes, they were informed that the additional revenue would be used to finance the super bonus. 

Sources close to the newspaper said the initial plan was for government to pay €500, with the remaining amount distributed at a later date. 

However, Prime Minister Robert Abela insisted the super bonus should be paid in full, prompting a further increase in the eco-contribution in the 2027 Budget. 

To accommodation sector stakeholders’ surprise on the day of the budget, the eco-tax was raised further, prompting criticism from the hotel lobby and other organisations.  

Sources who spoke with MaltaToday said the tax was further increased to cover the government’s super bonus costs.  

The higher tourist tax is expected to generate €214 million, with the additional revenue helping to cover the cost of the scheme. 

Meanwhile, tensions have emerged over how the government intends to allocate other revenue collected from the tourism sector. 

Aides close to Finance Minister Clyde Caruana have warned if Abela continues to insist that eco-contribution revenue be spent on Comino, while income collected from cruise liner tourists is channelled towards a new foundation dedicated to protecting and maintaining Valletta, the government risks missing its public finance targets. 

The super bonus, Labour’s flagship election pledge, will be paid out by March, with worker receiving tax-free payments ranging from €500 to €1,000 by March 2027, depending on their income in 2025. 

The Nationalist Party said it would retain the super bonus, but has come out against the increase in tourist contribution.  

It has suggested the increased rates be only in place during tourism high-season from May to October. The Opposition has warned the increase will impact the sector particularly in Gozo during shoulder months, given the large share of Maltese guests who holiday at these accommodations.