Total tax revenue in 2018 went up by €313.9 million over the previous year and stood at €4,029.7 million, a press release issued by the National Statistics Office on Friday morning has shown.
Tax revenue can be broadly classiﬁed under three main headings: indirect taxes, direct taxes and social contributions.
All three categories of tax revenue registered an increase over 2017.
As opposed to 2017, the largest increase was recorded in indirect taxes, which rose by €170.0 million, for a total of €1,593.8 million, or 39.6 per cent of total tax revenue. This increase was mainly triggered by higher Value Added Tax (VAT) receipts (€109.5 million) and Taxes on Products (€64.8 million), corresponding to an increase of 0.3 and 0.1 percentage points of GDP respectively over the previous year.
Concurrently, direct taxes increased by €81.9 million, amounting to €1,671.1 million or 41.5 per cent of the total tax revenue. The two key components of direct taxes, namely Personal and Corporate Income Tax, registered an increase of €125.0 million and a decrease of €47.3 million respectively.
Social contributions represented 19.0 per cent of total tax revenue in 2018, standing at €764.8 million. This reﬂects an increase of €61.9 million over 2017.
The overall tax burden denotes the total amount of taxes and social contributions, expressed as a percentage of GDP. In 2018, the tax burden for Malta was 32.7 per cent of GDP, which reﬂects a decrease of 0.2 percentage points when compared to the total tax burden recorded in 2017 (32.9 per cent of GDP).
Since 2001, total tax burden has been consistently above 30 per cent of GDP, while the average tax burden for the period 1995 to 2018 stands at 31.3 per cent. The contribution of current taxes on income and wealth towards tax revenues increased substantially from 8.2 per cent of GDP in 1995 to 13.4 per cent of GDP in 2018.
Consequently, the share of current taxes on income and wealth surpassed the share of taxes on production and imports by a margin of 0.6 percentage points in 2013, which decreased slightly to 0.5 percentage points by 2018.
By the end of last year, direct taxes were equivalent to 13.6 per cent of GDP compared to the share of indirect taxes which stood at 12.9 per cent of GDP. Meanwhile, the share of social contributions as a percentage of GDP stood at 6.2 per cent, remaining fairly constant over the years.
Income Tax receipts by European System of Accounts (ESA) 2010 institutional sector
In 2018, the household sector accounted for more than half of the income tax received by General Government with a share of 57.0 per cent, equivalent to €907.3 million, while the contributions of the non-ﬁnancial and ﬁnancial corporations’ sectors were 22.4 per cent and 20.2 per cent respectively.
On aggregate, rest of the world, non-proﬁt institutions serving households and general government totalled 0.5 per cent. In absolute terms, the €77.6 million increase in income tax receipts over 2017 were mainly collected from households (€125.3 million) and the non-ﬁnancial corporations (€36.3 million).
Conversely, income tax receipts from ﬁnancial corporations decreased by €82.0 million.
An environmental tax is whose base is a physical unit (or a proxy of it) of something that has a proven, speciﬁc negative impact on the environment, and which is deﬁned in the European System of Accounts (ESA 2010) as a tax.
In 2018, Malta’s total environmental taxes increased by €18.7 million, amounting to €321.7 million. This ﬁgure represents 8.0 per cent of the total revenues derived from all taxes and social contributions and 2.6 per cent of GDP.
Energy taxes (which include taxes on transport fuels) made up the largest share of environmental taxes, accounting for 50.3 per cent, followed by transport taxes (40.6 per cent) and pollution taxes (9.1 per cent). All environmental taxes registered an increase over the preceding year.