In Malta we will have a middle class which will not pay a cent in tax

During a press conference at Auberge de Castille following the presentation of the Budget 2026, Prime Minister Robert Abela stated that the Government will continue to invest in families with an unprecedented measure in a generation, that of a larger tax cut for working parents. In Malta, we will have a middle class of parents with two or more children earning up to €30,000 each who, within three years, will no longer pay any tax. This means that these parents will effectively be tax-free for almost a quarter of a century. Working parents with one child will also benefit from a significant tax reduction.

Dr Abela noted that while economies across Europe are stagnating and other Governments are resorting to austerity, the Maltese and Gozitan people are benefiting from the best budget in history. “A budget that gives peace of mind that Government is there for you. We are there when you start a family, when you raise children, and when you grow older. Because with strong families, we have a strong economy,” emphasised the Prime Minister. 

He added that those most in need will benefit from a €120 million social package. A single parent with two children on the minimum wage will see her income increase by €650 through the In-Work Benefit and higher Children’s Allowance.

Maltese and Gozitan pensioners will enjoy the eleventh consecutive pension increase through an adjustment that is double the cost of living. Additional increases are being granted to widows and to those born before 1962, as the Government continues to correct an injustice created in 2006. The Prime Minister also referred to the 15% increase in stipends for all students and the higher grant for Gozitan students studying in Malta.

Prime Minister Abela stated that the Budget continues to support businesses through generous yet targeted incentives. He added that Malta stands on the threshold of a total transformation. The Malta Vision 2050, that will be launched early next year, will set ambitious goals, including positioning Malta among the world’s best in human development, and ensuring that life satisfaction and family income levels rank among the top in Europe. To achieve this, he said, major investments are needed, with changes in business operations, technology, and workforce skills. For this reason, the Government is allocating a €100 million fund for the digital switchover and the adoption of AI across society.

From his end, the Deputy Prime Minister Ian Borg remarked that Budget 2026 builds on the achievements of the Maltese and Gozitan people in recent years, ensuring that economic stability truly translates into a better quality of life while steering the country towards greater resilience and sustainability. “Our people have always managed to rise above challenges and reach their goals. The economic success of recent years is unprecedented, a success achieved because we worked together as a nation. Yet the challenges it brings to various communities, along with global pressures, demand a strong collective commitment. Through this budget, the Government is providing the tools to keep pulling in the same direction, to continue working together for a better future for families and communities in our country,” said the Deputy Prime Minister.

Minister for Finance Clyde Caruana said that this Budget once again demonstrates that the Government remains a guarantee for the people. “Just as we did not hesitate to take the necessary decisions in the face of major challenges in recent years, today we continue to make bold, forward-looking choices. This is a budget built on well-studied, responsible measures, one that will positively shape the future of Maltese and Gozitan society,” stressed Minister Caruana.