End Tax Penalty On Local Businesses With Flat 20% Corporate Tax Rate, Says Momentum

Political party Momentum has called on the government to use Budget 2027 to reform Malta’s tax system, proposing a shift in the tax burden away from workers and local businesses.

The party said it wants to introduce a flat 20% corporate tax rate for all companies over a five-year period, while gradually increasing the effective tax rate paid by foreign corporations from 5% to 20%. Momentum said this would create a level playing field between local and foreign businesses.

The party also proposed raising the minimum wage to €360 per week through a four-year transition, while exempting annual cost-of-living adjustments from income tax so workers receive the full amount.

To address Malta’s brain drain, Momentum suggested a flat 15% income tax rate for graduates during their first five years after completing their studies. The party also proposed the same rate for Level 7 and 8 graduates and professionals returning to Malta after at least five years abroad, for their first decade back.

Momentum further called for stronger incentives for research and development, including zero tax on intellectual property income for companies investing more than 10% of their annual turnover in research for five years. It also proposed tax measures supporting renewable energy investment, young farmers and employee share option schemes.

Momentum Treasurer Carmel Asciak said the current system places too much pressure on workers and local businesses, arguing that reforms were needed to encourage talent to remain in Malta and ensure equal treatment.

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