Alex Borg promises no tax on all pensioners’ income up to €37,000

Alex Borg pledged on Sunday that a Nationalist government would make all income earned by pensioners up to €37,000 tax-free, accusing Robert Abela of misleading pensioners about recent tax changes. 

Addressing a political event in Senglea on Sunday morning, the PN leader said pensioners had been taken for a ride by the government after it announced changes to pension taxation earlier this month. 

“Many pensioners don’t rely only on their pension,” Borg said. “They may have part-time work, rental income or other investments because they need other revenue streams to keep up with expenses such as medicines and rent.” 

Borg said the government had suggested that pensioners’ income would become tax-free, but had instead only increased the ceiling for tax-exempt pension income. 

“Instead of exempting all income as promised, they simply raised the ceiling,” he said, adding that few pensioners actually receive €37,000 in pension payments alone. 

He pledged that if the PN was elected to government, it would introduce legislation in its first budget to exempt all pensioners’ income up to €37,000, regardless of whether it comes from pensions, part-time work, investments or rentals. 

“You have my word,” Borg said, describing the pledge as a “contract with the people”. 

Debate over pension taxation 

The issue became a political flashpoint after the government announced changes aimed at increasing tax exemptions for pensioners. 

According to a government statement earlier this month, new rules increase the tax-exempt threshold on pension income to €37,000, as part of a broader reform that will see pensions fully exempt from tax by 2026. 

However, the measure applies specifically to pension income, not to other income sources such as employment, investments or rental earnings. 

A Times of Malta fact-check examining the legal notice found that the exemption “only refers to pensions” and does not cover additional income streams earned by pensioners. 

Other income earned by pensioners continues to be taxed according to normal income tax rules. 

The debate intensified after the government also proposed exempting working pensioners from income tax on earnings up to twice the maximum pension. 

The PN has argued that the government’s messaging created the impression that all pensioners’ income would become tax-free, an interpretation ministers have denied. 

Delia attacks government record 

Addressing the event earlier on Sunday, shadow finance minister Adrian Delia accused the government of repeatedly misleading the public on a range of issues, including pension taxation. 

He said the legal notice cited by the government “only talks about pensions” and does not cover other income, such as investments or dividends. 

Delia also criticised the government’s economic management, pointing to Malta’s rising public debt, which he said had reached about €14 billion, and warning that further borrowing would increase financial pressure in the future. 

He accused the government of spending public funds on what he described as unnecessary projects and publicity events, while claiming the benefits of economic growth were being felt only by a small group. 

“The economy may be doing well for a few,” he said, referring to those benefiting from government tenders or direct orders. 

Delia also criticised the government’s Vision 2050 initiative, arguing that key infrastructure proposals such as a mass transportation system were still listed as “to be announced” in the strategy. 

Wider proposals 

Meanwhile, throughout his address, Borg outlined several other proposals that he said the PN would introduce if elected. 

These include making COLA increases tax-free, removing tax on the first €10,000 earned through part-time work or overtime, and reducing VAT on catering services from 18% to 7% within the first 100 days of a PN government. 

He also raised concern about workers at the Ħal Safi Aviation Park, saying more than 50 employees could face redundancy while others had not been paid since late January due to a dispute involving a company and government entities. 

“The price of disagreement should not be paid by workers,” Borg said. 

He said the PN would continue meeting workers, businesses and entrepreneurs as part of efforts to shape its economic vision for the country. 

Borg also urged political unity in light of international tensions, saying the opposition would support the government where necessary to ensure stability. 

“People are tired of politics based on propaganda and gimmicks,” he said. “They want honesty and a better direction for Malta.”