Malta registers big rise in tax burden

Between 1995 and 2005, Malta registered the second highest increase in overall tax ratio in the EU, according to figures issued by the EU's statistical office Eurostat yesterday.

This includes the total amount of taxes and social security contributions.

At the same time, however, taxation on the island is still considered as mid-range in the EU.

In a publication called Taxation Trends In the EU, issued in Brussels, Eurostat said the highest increases in the tax ratios of EU member states over the past 10 years were registered in Cyprus (from 26.7 per cent of GDP in 1995 to 35.6 per cent in 2005) and Malta (from 27.3 per cent to 35.3 per cent).

On the other side of the scale, Slovakia and Estonia have managed to lighten their tax burden.

Although the increase in the amount of tax netted as a percentage of Gross Domestic Product has increased substantially in Malta, the tax burden is still considered low when compared to the other member states.

In fact, in 17 member states, the tax burden in 2005 was higher than Malta's.

Sweden, for example, has the highest tax revenue as a percentage of GDP, amounting to 51.3 per cent.

Others also have very high taxes such as Denmark (50.3 per cent), Belgium (45.5 per cent), France (44 per cent), Italy (40.6 per cent) and the UK (37 per cent).

When it comes to taxes paid by workers on labour, including social contributions, Malta has the lowest rates.

According to Eurostat, Maltese workers contribute about 22.1 per cent of their earnings to the state, the lowest in the EU.

The most taxed are the Swedes who pass on 46.4 per cent of their earnings directly to the state. Labour is also highly taxed in Italy (43.1 per cent), Belgium (42.8 per cent) and France (42.1 per cent).

The top statutory personal income tax rate last year in the EU was in Denmark at 59 per cent.

The highest tax on income in Malta is 35 per cent.