Malta’s 2004 Tax Revenues Up 8.3% On Previous Year

by Robert Lee, Tax-News.com, London

17 October 2005

During 2004, Malta collected a total of Lm638.1 million (US$1.78 billion) in tax, an increase of Lm48.8 million or 8.3% over the tax revenues for 2003, the Maltese National Statistics Office confirmed last week.

According to the NSO's data, indirect taxes, which include VAT, import duties, excise duties, service taxes, and taxes on financial and capital transactions, accounted for Lm285.2 million or 44.7% of total tax revenues.

Direct taxes, which are current taxes on income and wealth plus capital taxes and include inheritance and gift taxes, increased in absolute terms by Lm2.3 million. However, as a share of total tax revenue, direct taxes declined from 38.0% in 2003 to 35.5% in 2004. While personal income tax increased its relative share by 0.5% over the previous year, corporate income tax and ‘other current taxes’ declined by 2.0% and 1.4% respectively.

Social contributions, defined as compulsory actual social contributions by employees and employers, as well as by self- and non-employed persons, increased in money terms by Lm4.1 million, although their relative share of total tax revenue declined from 20.7% in 2003 to 19.8% in 2004.

At 34.9%, Malta’s tax-to-GDP ratio for 2004 is 1.9% higher than the 2003 ratio of 33.0%, but is significantly lower than the 2003 average for the EU25 nations, which stands at 39.9%.

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