Total tax burden at 34.7% of Malta’s gross domestic product, up by €27.3 million

Higher revenues from direct taxes contributed to the rise in total tax revenue.

Direct taxes comprise 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 2009, direct taxes went up by €51.6 million, to €809.4 million, making up 40.6% of total tax revenue. This rise was mainly the result of additional returns from personal and corporate income tax, by €40.3 million and €1.8 million respectively. Moreover, other current taxes increased by €10.6 million.

On the other hand, revenue from indirect taxes, which are defined as taxes linked to production and imports, registered a drop of €24.3 million. In the year under review, these taxes were recorded at €833.4 million, and represented 41.8% of total tax revenue.

This tax category is mainly made up of VAT and taxes on products (including excise duties), both of which exhibited a fall.

Taxes on products declined by €26.0 million, whereas consumption taxes went down by €1.6

million. These declines were partly outweighed by higher income from other taxes on production.

Social contributions are compulsory actual social contributions paid by the employees, employers, as well as the self- and non-employed persons. This category stood at €351.8 million, or 17.6% of the total tax revenue.

The overall tax burden is defined as the total amount of taxes and actual social contributions expressed as a percentage of GDP. During 2009, the tax burden for Malta was 34.7%.