Robert Abela pledges to lower income tax, give out more refund cheques

Prime Minister Robert Abela has pledged to reduce income tax in the next legislature by significantly widening tax bands.

Speaking at a press conference this morning, Dr Abela said Malta's economy had performed well in the past years and is expected to do better in the coming ones. As a result, a Labour government would be able to reduce income tax and raise the country’s GDP from €14 billion to €20 billion within the next legislature.

The Prime Minister said the measure would leave a total of €66 million extra in people’s pockets, with low and medium-income earners benefitting the most.

If the changes are enacted, individuals will start paying tax after the first €10,800, up from €9,100. Parents will start paying tax after the first €12,500, up from €10,500, while the rate for married people will increase from €12,700 to €14,400.

Dr Abela added that the measure would be further bolstered with around €24 million a year in “generous” tax refund cheques that will be handed out every year of a new Labour-led legislature. 

He estimated that, as a result of these measures, an average person is expected to see their annual take-home pay increase by some €255.

After announcing the 26th March election date on Sunday, Dr Abela had announced that a Labour Government would also reduce corporate tax for businesses, which would pay 25 per cent tax instead of 35 percent tax on their first €250,000 profit.