Tax burden rises in 2011 to 33.7% of GDP

Total tax revenues in 2011 went up by €136.5 million over the previous year, and stood at €2,192.7 million.

Tax revenue may be broadly classified under three main headings: indirect taxes, direct taxes and social security contributions.

All three categories of tax revenues recorded an increase. The largest increase of €65.3 million was registered in indirect taxes like VAT, which are defined as taxes linked to production and imports.

In the year under review, these taxes stood at €928.3 million, representing 42.3 per cent of total tax revenues. This category is mainly made up of VAT and taxes on products (including excise duties), both of which exhibited an increase.

VAT went up by €42.8 million whereas an additional €24.7 million was recorded for taxes on products. Conversely, other taxes on production registered a decline of €2.1 million.

Direct taxes are current taxes on income and wealth plus capital taxes and other current taxes. Taxes on income are made up of both personal as well as corporate taxes. During 2011, direct taxes went up by €41.7 million, to €864.2 million, making up 39.4 per cent of total tax revenue.

This rise was mainly the result of additional returns from personal income tax, by €28.9 million, and corporate income tax, by €10.8 million. The other taxes in this category registered marginal increases.

Social contributions are compulsory actual social contributions paid by the employees, employers, as well as the self- and non-employed persons. This category represents 18.3 per cent of the total tax revenues and stood at €400.2 million, up by €29.5 million.

The overall tax burden denotes the total amount of taxes and actual social contributions expressed as a percentage of GDP. During 2011, the tax burden for Malta was 33.7 per cent.

In 2010, tax burden was at 33% of GDP, while in 2009 it was 34% and 33.6% in 2008.