Malta's Deficit Reached €484.8 Million by September 2026: What the Government's Own Accounts Say About Taxes in 2027

Malta's government spent €484.8 million more than it collected in the first nine months of 2026. A year earlier, the gap for the same period was €253.1 million. In 2024, the government's main account was still in surplus at this point of the year, by €142.3 million.

The figures come from the National Statistics Office's News Release 198/2026, published on 30 October, four days after Finance Minister Clyde Caruana presented the Budget for 2027. They are the first hard numbers since the speech, and they show both sides of the picture the minister described: revenue is growing quickly, and spending is growing faster.

For anyone who lives in Malta, or is thinking of moving there for the tax system, the interesting question is not the deficit itself. It is where the money comes from, what the government plans to do about the gap, and whether that puts pressure on the tax rules that make Malta attractive in the first place.

What the Consolidated Fund measures

The release covers the Consolidated Fund, the government's central account. It records cash coming in and going out of the Treasury between January and September. That is not the same figure the European Union uses to judge a country's deficit. The EU rules look at general government on an accrual basis, which includes other public bodies and records items when they are due rather than when cash moves. The NSO publishes that measure separately.

So the €484.8 million is not "the deficit" in the Maastricht sense. It is the best monthly indicator of the direction of travel, and it is the figure the Treasury itself watches during the year.

Revenue: income tax and VAT carry the year

Recurrent revenue reached €6,368.3 million, up €704.2 million or 12.4% on the same period of 2025. According to Table 1 of the full release, the growth came overwhelmingly from three sources:

Revenue item (Jan-Sep)	2025	2026	Change
Income tax	€2,279.2m	€2,629.0m	+€349.7m
Value added tax	€1,111.9m	€1,336.6m	+€224.7m
Social security	€1,200.0m	€1,284.6m	+€84.6m
Grants	€182.4m	€232.7m	+€50.3m
Licences, taxes and fines	€351.2m	€366.0m	+€14.8m
Customs and excise duties	€244.1m	€246.8m	+€2.7m
Fees of office	€106.5m	€61.4m	-€45.1m

Income tax alone accounts for 41.3% of recurrent revenue in these nine months, VAT for 21.0%. Income tax receipts rose by 15.3% and VAT by 20.2% in a single year. The release does not split income tax between individuals and companies. For the full-year picture by tax type, the NSO's tax revenue figures for 2025 show how far company tax has grown: it almost doubled between 2023 and 2025.

Two smaller lines stand out. Fees of office fell by €45.1 million, the largest decline of any item. The release records the drop but does not explain it. And there is a €10.0 million receipt from the Central Bank of Malta, a line that was empty in the same period of 2024 and 2025.

Spending: social benefits, energy and wages

Total expenditure reached €6,853.1 million, up €935.8 million or 15.8%. Recurrent spending accounted for €5,866.8 million of that, an increase of €754.5 million.

The largest category is "programmes and initiatives", which rose by €422.8 million to €3,476.4 million, just over half of all government spending. Within it, the NSO names three main drivers:

• Social security benefits: +€120.8 million.
• Energy support measures: +€63.4 million.
• EU own resources (Malta's contribution to the EU budget): +€43.6 million.

Wages and salaries in the public sector ("personal emoluments") rose by €124.7 million to €1,180.4 million. Operational and maintenance spending rose by €117.5 million, and contributions to government entities by €89.4 million.

Interest on the public debt cost €246.8 million, €25.4 million or 11.5% more than a year earlier. Capital spending rose by €156.0 million to €739.5 million, with higher outlays on projects under the EU Recovery and Resilience Plan (€71.0 million more) and on the acquisition of property for public purposes (€43.5 million more).

Debt: €11.96 billion at the end of September

Central government debt stood at €11,956.6 million at the end of September 2026, €846.4 million more than a year earlier. According to Table 6, almost all of the increase came from Malta Government Stocks (€658.9 million more) and Treasury Bills (€288.2 million more), partly offset by lower foreign loans (€80.1 million less).

In plain terms, Malta finances its gap by issuing its own government bonds and bills, while its borrowing from abroad is shrinking.

How it fits the Budget 2027 numbers

The fiscal chapter of the Budget Speech 2027, published by the Ministry for Finance only in Maltese, gives the annual frame. The key figures:

• 2025 closed with a deficit of 2.1% of GDP, against the 3.3% the minister had forecast a year earlier. He attributes the difference to revenue coming in well above expectations.
• 2026 is expected to close at 2.6% of GDP. The speech links the increase to higher energy subsidies after a new conflict in the Middle East pushed up energy prices.
• 2027 is planned at 2.6% again, because energy prices to households and businesses stay fixed.
• Energy subsidies equal 1.4% of GDP, about half of the deficit. The minister says that without the energy shock of the past six months, the 2027 deficit would have been almost one percentage point lower.
• Debt is expected at 46.7% of GDP in 2026 (the forecast a year ago was 47.3%) and 46.8% in 2027.

The speech also notes that Malta left the EU's excessive deficit procedure in June. On the revenue side, it expects total government revenue of €10.1 billion in 2027, €1.0 billion more than in 2026, of which tax revenue of €9.0 billion, up €645 million. Recurrent spending is planned at €9.4 billion and capital spending at almost €1.5 billion, with about €390 million of the capital budget coming from EU funds.

The September figures are consistent with that frame. A deficit that has almost doubled year on year in cash terms, mostly because of benefits, energy support and wages, is what a 2.6% target with fixed energy prices looks like in practice. Nine months of cash data cannot tell you whether the year will land exactly there.

What this means if you live in Malta or plan to move

No higher rates announced

The first point is the most important one. In the speech, the government ruled out increases in income tax rates, the VAT rate and social security contribution rates. Our Budget 2027 overview lists what was announced instead. Nothing in the September data changes that commitment. A deficit of 2.6% of GDP is below the EU's 3% reference value, and debt below 47% of GDP is well under the 60% reference value. The minister contrasted this in the speech with European countries whose debt and interest burden keep rising.

The money is raised elsewhere

The budget closes part of the gap through measures that fall largely on people who are not Maltese taxpayers in the ordinary sense. The speech announces a higher fee for non-EU work permits, from €600 to €800, plus a new annual €400 infrastructure contribution, expected to raise about €80 million. It raises the eco-contribution on tourist accommodation from 1 January 2027 to €8 a night in hotels and similar establishments, up to €64 per person, and €10 a night in short lets, up to €80 per person, with expected revenue of about €182 million. Both still need implementing rules. As of 8 November, the Legislation Malta feed shows no Act or Legal Notice that implements a Budget 2027 measure; the latest notices, L.N. 306 and 307 of 2026, deal with data protection and marine vegetation. Last year's measures became law with the Budget Measures Implementation Act, 2026 in March 2026.

The structure of the tax system is not where the pressure is

Malta's attractions for internationally mobile people are structural: the remittance basis for non-domiciled residents, the absence of wealth and inheritance tax, and the company tax system with its shareholder refunds or the 15% election explained in our corporate tax guide. The speech does not touch any of them. Revenue is growing without any increase in rates. Why these features have proved durable is covered in our piece on why Malta has no wealth tax.

That does not mean the rules can never change. It means the current fiscal numbers give the government no urgent reason to change them, and the budget it just presented chose fees on non-EU work permits and on tourism over higher taxes on residents.

Growth is doing the heavy lifting

The speech forecasts real GDP growth of 4.1% in 2026 and 3.8% in 2027, and the second-quarter national accounts covered in our GDP Q2 2026 piece showed the economy still expanding strongly. Revenue that grows by more than 12% a year depends on that. If growth slowed sharply, the 2.6% target would be harder to hold, and the energy subsidy bill would become the obvious place to look. For residents, that is the item to watch: electricity and fuel prices are fixed by policy, and the policy has a price of about 1.4% of GDP a year.

Key figures at a glance

• Consolidated Fund deficit, January to September 2026: €484.8 million (2025: €253.1 million).
• Recurrent revenue: €6,368.3 million, +12.4%.
• Income tax: €2,629.0 million, +€349.7 million.
• VAT: €1,336.6 million, +€224.7 million.
• Total expenditure: €6,853.1 million, +15.8%.
• Interest on debt: €246.8 million, +11.5%.
• Central government debt, end September: €11,956.6 million, +€846.4 million.
• Government targets: deficit 2.6% of GDP in 2026 and 2027; debt 46.7% and 46.8% of GDP.

The next NSO government finance release, covering January to October, will show whether the gap kept widening into the final quarter.

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