LA VALLETTA (MALTA) (ITALPRESS/MNA) – The Maltese government announced a significant revamp of Maltàs tax system for 2025, promising to put “550 million back in peoplès pockets” while simultaneously reducing energy subsidies. While presenting the Budget speech for 2025, Finance minister Clyde Caruana announced a comprehensive tax reform raises the zero-tax threshold to 12,000 for single taxpayers, while married couples will now enjoy tax-free earnings up to 15,000. Parents will benefit from a new 13,000 threshold. During the Budget speech, Finance Minister Clyde Caruana said other EU countries are introducing more taxes. He showed an online article quoting Minister Giancarlo Giorgetti, Italian Minister of Economy and Finance declaring that the Italians will be asked to do more sacrifices in 2025. However, these tax adjustments, that will cost the Maltese government 140 million, come alongside a significant reduction in energy support measures. Government spending on energy subsidies will decrease from 300 million to 175 million in 2025, despite ongoing cost-of-living pressures faced by ordinary households. The budget presentation was notably interrupted by Moviment Graffitti protesters, accusing the government of “dancing to the tune of developers.” They raised concerns about the influence of property developers on government policy. Their dramatic demonstration inside the Parliament Chamber, highlighted growing public anger about the direction of Maltàs economic development.
The government’s economic strategy appears firmly focused on meeting EU fiscal targets, with plans to reduce the deficit to below 3% of GDP by 2026 – a year ahead of schedule. This achievement, however, comes as public debt is projected to reach 13.5 billion by 2027.
GDP growth is expected to remain robust at 4.3-4.5% over the next three years, significantly above EU averages. Yet questions remain about how this prosperity will be distributed, particularly as the gap between government revenue and expenditure is set to widen, with recurrent expenditure dropping to 27.5% of GDP by 2027 while revenue holds at 31.5%.
As part of a broader strategy aimed at balancing the growing demands on the pension fund with long-term sustainability, the government will be extending the required years of contributions for full pension eligibility from 41 to 42 years for individuals born in 1976 or later.
Addressing a press conference following the Budget speech, Prime Minister Robert Abela pledged to follow up the 2025 Budget with a series of “action plans” which, he said, would address the “major challenges that our country is facing.” Among other issues, he said, these would aim to address Maltàs tourism sector, pledging that Malta would no longer measure success by the volume of tourists that reach the country every year.
Abela insisted that the government would be implementing a number of short-term and medium-term solutions to traffic.
He said that Maltàs growing population and its impact on infrastructure was now the most important concern for the Maltese public, and insisted that the budget “was the start of an action plan to address and solve these challenges.” He also rejected suggestions that transforming Maltàs economy should “close the door to the construction sector.” Meanwhile, Opposition leader Bernard Grech said the Budget was an attempt by Robert Abela to save his political career in the shadow of Labour’s poor electoral result in last Junès European Parliament election. “The government knows what the peoplès problems are – the quality of life, infrastructure, over population, services, power cuts, drainage problems – the Budget fails to address these problems,” he said.
The Malta Chamber of Commerce, Enterprise and Industry said that while the Government has recognised the importance of quality over quantity, the Budget 2025 still lacks the necessary measures and economic vision to drive a major quality leap and a tangible improvement in the well-being of society.
– Photo Agenzia Fotogramma –
(ITALPRESS).
