The tax burden stood at 35 per cent of GDP last year, when €2.7 billion in taxes were collected, figures out yesterday showed.

The National Statistics Office said the taxes collected last year amounted to €260 million more than in 2013, despite a drop in the top income tax rate for those earning less than €60,000. The tax burden was 33 per cent in 2013.

The tax burden is a ratio that calculates taxes as a percentage of a country’s GDP.

The latest figures show that Malta’s tax burden is below the EU28 and eurozone averages. According to figures released in June by Eurostat, the EU statistical agency, the average tax burden in the EU28 stood at 40 per cent in 2013. The average tax burden in the eurozone was higher at 41 per cent.

The ratio of 2013 tax revenue to GDP was highest in Denmark, Belgium and France (49 per cent, 48 per cent and 47 per cent, respectively), while the lowest shares were recorded in Lithuania (27 per cent), Romania (27.4 per cent), Bulgaria and Latvia (both at 28 per cent).

The NSO reported that direct taxes, levied on income, wealth and capital, brought in €1.2 billion in 2014, while indirect taxes, which include VAT and excise tax, contributed €1.1 billion.

Consistent with the government’s drive to shift from production to consumption taxes, the largest increase was recorded in indirect taxes, which contributed an additional €119 million.

VAT saw receipts grow by €60 million and excise taxes jumped by €50 million. Over the past two and a half years, excise taxes on mobile telephony, cement, fuels and cigarettes increased, while the eco-contribution on tyres, chewing gum and plastic containers was replaced with an excise tax.

Receipts from personal income tax grew by €38 million, while corporate taxation gave the exchequer €36 million more last year.

Capital taxes registered a marginal decline of €900,000, possibly driven by the scheme to exempt first-time buyers from stamp duty. Social contributions, representing 17 per cent of total tax revenue, increased by €31 million last year.

kurt.sansone@timesofmalta.com

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