As the government unveils its financial roadmap for the coming year, we’re here to bring you timely updates, expert insights, and practical takeaways, all in real time. Whether you’re a Maltese family looking to understand how new measures will affect your household, a business owner planning for the year ahead, or an individual, local or foreign, keeping an eye on Malta’s economic direction, our live blog will guide you through the key announcements, analysis, and what they mean for you.
18:40
Malta’s economy continues to outperform much of Europe, with GDP rising by 3.1 percent in real terms this year, more than double the EU average, and expected to reach 4.1 percent by year end, driven by strong domestic demand and public investment. Gross Value Added has increased by 6 percent in nominal terms, reflecting broad based growth across key sectors. Looking ahead, economic expansion is set to continue at a similar pace in 2026, supported by resilient consumer activity, government led projects, and a steady recovery in tourism and digital services. Meanwhile, inflation is forecast to stabilise at around 2.2 percent, signalling a more balanced and sustainable outlook for Malta’s economy.
18:41
The Cost of Living Adjustment for 2026 has been set at €4.66 per week, the finance minister announced. This is slightly lower than last year’s €5.24 adjustment and well below the higher figures seen when inflation was at its peak in previous years. The new rate reflects a stabilising inflation environment, with price growth expected to remain around 2.2% in the coming year, signalling a return to more balanced and sustainable economic conditions.
18:45
Malta’s public finances are on a firmer footing, with the debt-to-GDP ratio expected at 47.1% by year’s end and set to return to pre-pandemic levels in the coming years. The deficit is projected to fall to 3.3% this year and 2.8% next year, keeping Malta within EU fiscal stability rules and highlighting continued progress in strengthening the country’s financial position.
18:48
The minister highlighted five key measures introduced over the past decade to support families with children, including free childcare, breakfast clubs, free school transport, the in-work benefit and higher children’s allowances, which together cost around €160 million a year. He contrasted these with past policies, recalling how, in 1995, the Nationalist government cut children’s allowances for families earning more than Lm10,000 a year. “The government used to think of families with children as a burden,” he said, noting how priorities have since changed.
18:50
A major measure in this year’s budget is the introduction of new income tax bands for families with children, bringing significant savings especially for those with two or more children. In total, this measure is expected to save families around €160 million in income tax, compared to the €140 million cost of last year’s general tax cuts. While last year’s changes saved the average person about €500, the new structure is projected to save the average parent around €2,400. The tax reduction will be phased in over the next three years, running until 2028.
18:54
The budget introduces four new income tax bands for families, based on whether they file under the married or parent computation and on the number of children they have. The biggest benefit goes to parents with two or more children, whose tax free threshold will gradually rise from €13,000 to €30,000 by 2028. The new bands will be phased in over three years, starting this year. Parents will remain eligible for the reduced tax rates until their children turn 18, or 23 if they are still in education, with families moving to the one child brackets once the oldest child passes the age limit.
In simple terms, the more children a family has, the less income tax they will pay, and parents will keep these benefits for as long as their children remain in full-time education.
Families with one child are expected to save between €2,175 and €3,600 per year by 2028, depending on their income level and whether they file taxes under the married or parent computation.
19:00
The largest savings will go to families with two or more children, as their tax-free threshold will more than double over the next three years, reaching €37,000 for those filing under the married computation and €30,000 each for those on the parent computation. By 2028, families with two working parents earning €30,000 each will pay no income tax at all. Parents in this group will save up to €1,625 each following year, rising to €5,000 each by 2028, with total annual savings ranging from €6,000 to €10,000 depending on income and tax category. On average, parents can save approximately €3,500 per year, and over 25 years, these savings could accumulate to between €150,000 and €257,000.
19:06
Pensioners will receive an increase of €10 per week, while widows and widowers will see their pensions rise by an extra €3.50 each week. Those who are still raising children under the age of 23 will benefit from an additional €10 per week on top of that amount.
19:07
Supplementary allowances will also rise, with maximum weekly rates increasing to €27.30 for couples and €14.40 for individuals. The income thresholds are being raised as well, to €20,000 for couples and €14,000 for single people. The minister also announced several other targeted increases for different groups of senior citizens, including those with service pensions and others who are not eligible for a pension. Elderly people living at home, with relatives, or in private care homes will receive an additional €75 in their annual grant.
19:10
Jobseekers will now receive the highest rate of unemployment benefits for 10 weeks instead of six, while the total eligibility period of 16 weeks will remain the same.
19:13
Low income families will benefit from higher children’s allowances, with the income threshold for the top rate rising to €30,000 and those earning below that amount receiving an additional €250 per child each year.
19:16
Around 20,000 pensioners born before 1962 will receive an adjustment to address an old pension reform anomaly, while the tax free threshold for working pensioners will now be set at double the maximum pension, completing a process first announced in 2022.
19:20
Plans are in place to introduce a partial invalidity pension for people whose conditions limit their working hours but do not prevent them from being employed, with eligibility requiring at least three years of treatment for psychotic or acute depression or bipolar disorder under the care of a government-employed psychiatrist.
19:30
The government will begin discussions with social partners on increasing maternity, paternity and parental leave. Parental leave, which currently allows eight weeks per child until the child’s eighth birthday, will be extended to self-employed parents, who will also gain access to bereavement and miscarriage leave. In addition, the scheme that allows public sector workers to donate unused leave to colleagues facing health or personal challenges will be expanded to include new parents.
19:33
Support for first-time buyers is being strengthened, with the deposit scheme now covering properties worth up to €250,000 and the €1,000 annual grant for 10 years remaining in place. The government is also in talks with banks to help low-income earners access home loans. The equity sharing scheme, which allows co-purchasing with the Housing Authority, will be extended to people aged 25, while separated individuals will be able to buy properties valued up to €350,000. Incentives for first-time buyers introduced in 2013 will continue and are set to become permanent through new legislation, and people who previously bought non-residential property will still qualify as first-time buyers when purchasing their first home.
19:38
The minister announced that the Business Development Scheme will be extended, alongside new incentives aimed at supporting start-ups that promote Maltese language, culture and the arts. He also mentioned plans for a new initiative focused on mental health in the workplace, though no details were provided. Additionally, upcoming legal changes will enable 16-year-olds to establish their own businesses and engage in commercial activities independently.
19:41
A series of measures designed to support family businesses as they plan for succession will be extended, including tax incentives, training vouchers and assistance to modernise and digitalise their operations.
19:43
Digital Infrastructure Investments
Major infrastructure projects such as the National Payments Centre and Centralised Identity Management System are underway. These will simplify payments, improve compliance, and make financial transactions more seamless for both institutions and consumers.
Skills & Workforce Development
The government reaffirmed its commitment to professional training and upskilling, ensuring Malta’s workforce remains competitive in an evolving financial landscape driven by innovation and digital transformation.
Fintech Momentum & MiCA Impact
Malta’s early legislative leadership in blockchain and digital assets is paying off under the EU’s MiCA framework. Global players such as Bitpanda, Crypto.com, Gemini, and OKCoin Europe have consolidated operations locally, signalling trust in Malta’s regulatory environment.
Industry Outlook
Fintech growth continues across payment platforms, digital identity solutions, and finance apps, creating new, high-value careers in compliance, software engineering, and financial technology.
19:50
The government is allocating €50 million to support self-employed and small businesses, encouraging investment and growth without cutting corporate tax.
Companies investing in AI, automation, cybersecurity, and innovation will benefit from a 175% tax deduction on R&D spending.
The Micro Invest scheme now covers digital solutions, increases tax credits to €65,000, and keeps the 20% Gozo bonus. Total aid can reach €85,000 to boost competitiveness.
20:00
Government to Cover Wage Increases
Through the Micro Invest scheme, the government will support private sector wage growth and talent retention.
Employers can claim 65% of salary increases for staff employed for four years or more, up to €780 per year.
In Gozo, the rate rises to 80%, with a maximum of €960 per year.
The Micro Invest cap increases to €65,000 in Malta and €80,000 in Gozo, providing stronger incentives for staff development and retention.
20:05
60% Investment Tax Credit
Businesses investing in machinery, tools, IT software, electronics, or cybersecurity will benefit from a 60% tax credit, spread over four years.
A €100,000 investment would generate €60,000 in tax credits.
Support for Cooperatives
From next year, cooperatives will no longer be required to submit audited accounts for tax purposes, easing bureaucracy and simplifying compliance.
20:10
Higher Micro Invest Credits
Tax credits under the Micro Invest scheme will rise to €65,000, covering up to 65% of eligible costs.
Gozo-based businesses will keep their 20% bonus on top of this amount.
Support for Wage Growth
The government will help companies cover salary increases for long-term employees, contributing up to €780 per year — with higher support for Gozo-based firms.
20:12
Over the next two years, companies can get a 60% tax credit on investment in machinery, tools, software, IT equipment or cybersecurity tools. The tax credit will be spread out over four years.
20:21
From next year, co-operatives will be exempt from submitting audited accounts.
The measure aims to reduce red tape and simplify compliance for small organisations.
21:10
Budget 2026 balances economic growth with social responsibility, strengthening Malta’s competitiveness while supporting families, workers, and businesses.
Thank you for following CLA Malta’s live coverage of Budget 2026.
Stay tuned for our in-depth analysis and expert commentary on what these measures mean for your business, your finances, and Malta’s future.