PN proposes new tax band to give families with more than one child €8,500 a year
Government says they suggested that same idea months ago
Updated 7.41pm
The Nationalist Party has proposed a new tax band for families with more than one child, a measure it says will leave each family €8,500 wealthier annually.
The proposal, unveiled in a press release on Friday afternoon, is aimed at directly addressing the financial burden of raising children and encouraging an increase in the country's declining birth rate.
The Opposition suggested a second tax band, which they are calling “Parent 2”, should be introduced for parents with more than one child and urged the government to include it in next month’s budget for 2026.
“Studies show that raising a child until the age of 18 costs between €7,000 and €9,000 a year,” the PN pointed out, adding that the new tax bracket would provide €8,500 more annually for families, “exactly the amount needed for every child”.
However, this suggestion echoes an identical one put forward by Finance Minister Clyde Caruana in parliament in February when he suggested a second tax incentive for families who opt to have more than one child.
"We need to be more bold," Caruana had told the House, adding that a tax incentive should be offered to those families who opt to have more than one child "so they can be helped with thousands of euros each year".
The PN recalled that in 2012 a Nationalist government had introduced tax bands to incentivise parents with the parent tax rate.
“This new measure announced today builds on that vision,” the party said.
Latest Eurostat figures show that Malta’s fertility rate is 1.06, the lowest in Europe.
“To maintain Malta’s population, the birth rate must reach 2.1 per woman – precisely what this measure addresses,” the PN said.
Finance minister Clyde Caruana conceded this was Malta’s “greatest challenge of our time” and hinted that the upcoming budget may include measures that reward larger families saying “we need to encourage more families to have at least two children”.
Earlier this week, PN leader Alex Borg urged the government to back its proposal to extend paid parental leave to a full year across both the public and private sectors.
On Friday, the PN said it will be publishing further details on its “carefully studied proposal” in the coming days.