Income tax has been reduced in the last three years.
Byron Camilleri
Income tax was cut in 2025, when the tax bands were widened for all taxpayers, and again in 2026 and 2027 through new, lower tax tables for parents. The parents' cut is worth at least €160 million over three years and continues into 2028.How we reached this verdict ↓
Analysis and evaluation
Income tax has been cut in each of the last three Budgets. The 2025 Budget widened the tax bands for every taxpayer. The 2026 Budget started a three-year cut for parents, and the 2027 Budget confirms its second step.
2025: wider bands for everyone
The Budget for 2025, presented in October 2024, widened the tax-free and lower-rate bands under all three computations, single, married and parent. From 2025, a single person pays no tax on the first €12,000, a married couple on the first €15,000 and a parent on the first €13,000. PwC put the resulting tax savings at between €345 and €675 a year.
| Rate | Single | Married | Parent |
|---|---|---|---|
| 0% | €0 to €12,000 | €0 to €15,000 | €0 to €13,000 |
| 15% | €12,001 to €16,000 | €15,001 to €23,000 | €13,001 to €17,500 |
| 25% | €16,001 to €60,000 | €23,001 to €60,000 | €17,501 to €60,000 |
| 35% | €60,001 and over | €60,001 and over | €60,001 and over |
Income tax bands from 2025. Source: BDO Malta, Budget 2025 highlights.
2026 and 2027: a three-year cut for parents
The Budget for 2026 created separate tax tables for families with one child and families with two or more, under both the married and parent computations. In tonight's speech, the minister described it as the largest income tax cut for families with children, worth at least €160 million over three years and benefiting about 68,000 parents (p. 35).
The thresholds rise in steps. A single-earner married couple with one child paid no tax up to €17,500 in 2026. That rises to €20,000 in 2027 and €22,500 in 2028, and the maximum saving grows from €725 in 2026 to €1,450 in 2027 and €2,175 in 2028 (p. 36). The other three family tables rise in the same way.
The cuts since 2026 apply only to parents. Taxpayers without children last saw their bands widened in 2025.
Editorial note
How we assessed this claim
We read "the last three years" as the tax years 2025, 2026 and 2027, covered by the last three Budgets.
We counted a change as a cut when it lowers the tax due on the same income, through a higher tax-free threshold or wider lower-rate bands.
True, because each of the three years brought such a change.
Limitations
- Since 2026 the cuts have applied only to parents. People without children last saw a cut in 2025.
- The 2027 step was set out in the 2026 Budget and confirmed in tonight's speech, so it is not a new measure this year.
Sources
- Budget Speech 2027, Hon. Clyde Caruana, Minister for Finance, 26 October 2026, pp. 35 to 40
- BDO Malta, Malta Budget 2025: Key Highlights
- PwC Malta, Malta Budget 2025
- KPMG, Malta: Tax measures in 2025 budget (October 2024)