The share of tax revenue from taxes on income and wealth has increased substantially in the past 20 years, from 8.2% of GDP in 1995 to 13.9% of GDP in 2016.
Last year, direct taxes were equivalent to 14.1% of GDP compared to the share of indirect taxes which stood at 13.1% of GDP.
In 2016, the tax burden for Malta was 32.6% of GDP, which is slightly higher when compared to the total tax burden recorded in 2015 (32% of GDP).
The overall tax burden denotes the total amount of taxes and actual social contributions, expressed as a percentage of GDP.
Throughout the past six years, total tax burden has been consistently above 32% of GDP, while the average tax burden for the period 1995 to 2016 was 30%.
Meanwhile, the share of social contributions as a percentage of GDP stood at 5.5% of GDP, fairly stable over the years.
Throughout the past six years, total tax burden has been consistently above 32% of GDP, while the average tax burden for the period 1995 to 2016 was 30%.
Total tax revenue last year went up by €272.8 million over the previous year, and stood at €3,243.3 million.
Tax revenue can be broadly classified under three main headings: indirect taxes, direct taxes and social security contributions. All three categories of tax revenue registered an increase.
As opposed to the previous year, the largest increase was recorded in direct taxes by €147.4 million, amounting to €1,399.9 million, or 43.2% of total tax revenue. This increase was triggered by higher tax receipts from individuals (€82.7 million) and corporations (€63.3 million), corresponding to an increase of 0.4 and 0.2 percentage points of GDP respectively over 2015.
Concurrently, indirect taxes increased by €87.4 million, amounting to €1,301.0 million or 40.1% of total tax revenue. The two main components of indirect taxes namely VAT and Taxes on Products, witnessed an increase of €44.5 million and €42.6 million respectively.
Other taxes on production went down by €0.2 million to €61.4 million.
Social contributions represented 16.7% of total tax revenue in 2016, standing at €542.4 million, equivalent to a €38.1 million rise over 2015.
In 2016, Malta’s total environmental taxes increased slightly by €7.8 million, amounting to €276.7 million. This figure represents 2.8% of GDP and 8.5% of the total revenues derived from all taxes and social contributions.
Energy taxes (which include taxes on transport fuels) made up the largest share of environmental taxes, accounting for 52.3%, followed by transport taxes (40.8%) and pollution taxes (7%). The latter went down by €2.8 million over the preceding year.