Malta's Budget 2027 was announced on 26 October, and several of its measures are good news for small businesses and working families. Here is what the sources report.
A lower tax rate for small businesses
BusinessNow reports that the Government has announced a new framework cutting the corporate tax rate from 35 per cent to 25 per cent for companies with a turnover of under €1 million. The measure was unveiled in Finance Minister Clyde Caruana's Budget speech.
The cut applies to retained or reinvested earnings. Companies that choose to distribute their profits as dividends are still taxed at the standard 35 per cent. According to the Government, the main goal is to ease the tax burden on smaller enterprises, strengthen their resilience and free up capital for domestic investment.
BusinessNow also notes that a lower corporate tax rate has long been requested by the local business community.
The move was welcomed by business groups. In BusinessNow's round-up of reactions, the Malta Chamber of SMEs welcomed the reduction to 25 per cent. Malta Employers also welcomed it, together with the continuation of energy subsidies and additional tax relief for parents. Newsbook adds that the Gozo Business Chamber welcomed the continued fuel and energy subsidies as well as the lower rates for businesses under €1 million.
Support for families and workers
BusinessNow reports that the Budget includes a €1,000 super bonus for local workers and those on long-term residency. Newsbook reports that Caruana confirmed it will be paid next year. Newsbook says it is for workers who have been resident in Malta for at least five years.
UĦM Voice of the Workers welcomed several of the social measures, including the continued energy subsidies and the super bonus. The Malta Chamber welcomed tax relief for families and higher pensions.
Newsbook reports that Prime Minister Robert Abela said the €400 million energy subsidy gives the stability that allows tax cuts and benefit increases. He also pointed to free therapy for neurodivergent children and full pensions for widows and for women who were previously ineligible.
On the public finances, Newsbook reports that the Government projects a deficit of 2.6 per cent of GDP for 2026 and 2027. It says Malta is one of the few EU countries with a deficit below the 3 per cent threshold.
What employers and workers can take from this
For owners of small firms, the lower rate on reinvested earnings gives a clear reason to put profits back into the business. The Government's stated aim is that this frees up capital for investment at home.
For workers and parents, the tax relief and the bonus add to household budgets, and the energy subsidies continue.
Business groups also said they want a clearer long-term plan. Malta Employers, for example, said it would like to see more detail on incentives for digitalisation, automation and higher-value activities. That points to where the conversation goes next: how the extra room in small firms' finances can be used for investment, skills and productivity.
Sources
BusinessNow – Tax on reinvested earnings slashed to 25% for companies with under €1 million turnover – businessnow.mt/tax-on-reinvested-earnings-slashed-to-25-for-companies-with-under-e1-million-turnover
BusinessNow – Malta's business community reacts to Budget 2027 – businessnow.mt/maltas-business-community-reacts-to-budget-2027
Newsbook – Budget 2027: The reactions, as they come in – newsbook.com.mt/en/budget-2027-the-reactions-as-they-come-in
Newsbook – Watch: Abela says foreign workers have little to complain about over loss of free transport – newsbook.com.mt/en/abela-caruana-and-borg-address-press-conference-after-budget-speech