Companies contributing 36% of Government’s income tax

Non-financial and financial corporations contributed 18.9 per cent and 17.1 per cent, respectively, while non-profit institutions, general government, and international bodies collectively made up 0.3 per cent of the total, reported the NSO.

This means that companies contributed 36 per cent of Government’s income tax.

Meanwhile, households were the main contributors to income tax in 2023, accounting for 63.7 per cent of the total income tax collected, equivalent to €1.5 billion.

The overall increase of €180.8 million in income tax receipts over 2022 was primarily driven by higher receipts from households (€138.4 million) and financial corporations (€102.9 million).

Meanwhile, tax revenues in Malta increased significantly in 2023, reaching a total of €5.6 billion—an impressive growth of €436.3 million over the previous year.

Direct taxes contribute nearly half of total revenue

Direct taxes amounted to €2.5 billion, comprising 45.6 per cent of the overall tax revenue, and showed an increase of €194.5 million compared to 2022. The main contributor to this rise was personal income tax, which increased by €138.2 million. Corporate income tax also saw an uptick, rising by €41.3 million year-on-year.

Growth in indirect taxes

Indirect taxes also experienced growth, amounting to €1.9 billion, which marked an increase of €164.3 million over the previous year and represented 35.4 per cent of the total tax revenue. Value added tax (VAT) was the most significant component within this category, generating €1.3 billion—an increase of €79.3 million compared to 2022.

Taxes on products contributed €566.4 million, up by €52.8 million from the previous year, driven by higher tax revenues from duty on documents and motor vehicle registrations. This increase was partially offset by a decline in gaming taxes and excise tax on cement. Other production taxes totaled €114.2 million, reflecting a rise of €30.7 million over 2022.

Social contributions maintain steady growth

Social contributions from employees, employers, and both self- and non-employed individuals accounted for 19.1 per cent of the total tax revenue in 2023, totalling over €1 billion.

This represented an increase of €77.6 million compared to the previous year.

A decrease in overall tax burden

The overall tax burden, defined as the total taxes and social contributions as a percentage of GDP, fell by 1.2 percentage points in 2023 to 27.1 per cent, down from 28.3 per cent in 2022.

Over the long term, the tax burden has averaged approximately 30.4 per cent from 1995 to 2023, with figures ranging from a low of 25.5 per cent to a high of 34 per cent, indicating a relatively stable tax environment over the years.

Direct and indirect taxes’ share of GDP

By the end of 2023, direct taxes constituted 12.3 per cent of GDP, while indirect taxes accounted for 9.6 per cent.

Social contributions represented 5.2 per cent of GDP, reflecting a decrease of 0.3 percentage points compared to the previous year.

Environmental tax revenue sees modest increase

Total environmental tax revenue in 2023 rose by €28.2 million, reaching €315.5 million, representing 5.6 per cent of total tax revenue and 1.5 per cent of GDP.

Energy taxes, including transport fuel taxes, constituted the largest share of environmental taxes and increased by €10.6 million, largely due to higher revenues from emission trading permits, which rose by €9.4 million. Transport taxes accounted for 41.1 per cent of environmental tax revenue, followed by pollution taxes at 9.7 per cent.