Tax revenue up by €190m in 2007

Tax revenue last year increased by 9.8 per cent, or €190 million, over the previous year, amounting to €1,889.2 million, the National Statistics Office said yesterday.

The NSO broadly classifies tax revenue in three groups: indirect taxes, direct taxes and social security contributions.

Indirect taxes are defined as taxes linked to production and imports and include VAT, import duties, excise and other specific taxes on services and financial and capital transactions. Last year, these made up 43.7 per cent, or €825.4 million, of the total tax revenues, growing by just €44,569 over the year before.

Under this category, the NSO considers VAT as the most important component, amounting to 22.2 per cent (€420 million) of the total tax revenue.

Direct taxes are those on income (both personal and corporate) and wealth, plus capital and other current taxes. These rose by €117.2 million last year to €741.6 million, making up 39.3 per cent of the total tax revenue. The NSO said this increase was essentially brought about by an increase of €112.6 million in revenue from corporate tax.

The third tax revenue category, social contributions, are compulsory actual social contributions paid by employees, employers and by the self- and non-employed. Revenue from this category increased by €7.2 million, totalling €322.1 million and making up 17.1 per cent of the total tax revenue.

The NSO explained that the overall tax burden is defined as the total amount of taxes and actual social contributions expressed as a percentage of GDP.

The tax burden for Malta rose to 34.9 per cent in 2007 from 33.8 per cent a year earlier.