Tax revenue up Lm49 million

Total tax revenue last year amounted to Lm638.1 million, an increase of Lm48.8 million over the revenue for 2003, the National Statistics Office said yesterday.

Indirect taxes at Lm285.2 million make up 44.7 per cent of total tax revenues. Indirect taxes are taxes linked to production and imports. This category includes VAT, import duties, excises and other specific taxes on services and on financial and capital transactions.

Last year, excise duties (mainly on cigarettes, petroleum and alcohol) accounted for Lm54.4 million while VAT raised Lm139.8 million.

Although in absolute terms, revenue from direct taxes increased by Lm2.3 million, their share of total tax revenue declined from 38 per cent in 2003 to 35.5 per cent last year. Direct taxes are taxes on income and wealth plus capital taxes, which include inheritance and gift taxes. Income tax includes both personal and corporate tax.

While personal income tax increased its relative share by 0.5 per cent, corporate income tax and "other current taxes" declined by 2.0 and 1.4 per cent respectively.

Although social contributions increased by Lm4.1 million, their relative share of total tax revenue declined from 20.7 per cent in 2003 to 19.8 percent last year.

At 34.9 per cent, Malta's tax-to-GDP ratio for last year stood at 1.9 percentage points higher than the ratio of 33 per cent for the previous year. Compared to the EU average for 2003, Malta's tax burden for that year was considerably lower than the EU25 average of 39.9. Since the European Commission is still validating the 2004 tax data for some member states, for the time being the 2004 tax burden for the EU25 is not available, the NSO said.