The Malta Chamber Reacts To Budget 2026: Increases Disposable Income For Families, Supports Businesses In AI Adoption, But Leaves Traffic Congestion Unresolved
The Malta Chamber of Commerce, Enterprise and Industry welcomes Budget 2026’s focus on supporting families and improving disposable income, as well as the social assistance measures for pensioners and vulnerable groups.
The Chamber also welcomes initiatives aimed at facilitating the business community’s transition towards AI adoption, automation, and digitalisation, alongside continued investment in employee training. These measures align with the Chamber’s long-standing advocacy that digitalisation should be prioritised to boost productivity and international competitiveness. The 60% capital investment tax credit, the tax write-off incentive, the expansion of the micro-invest scheme, and the 175% R&I deduction provide strong incentives for companies to adopt automation, embrace AI, and invest in robust cybersecurity frameworks designed to modernise operations and enhance supply-chain visibility, ultimately increasing efficiency and effectiveness.
Other areas where the Chamber’s advocacy has yielded results include the Government’s commitment to establish a new logistics free zone near the airport, directly linked to the Freeport a strategic step in positioning Malta as a Mediterranean hub for trade, distribution, and re-export.
Regarding clean energy, the Chamber acknowledges the revised policy for photovoltaic installations on industrial rooftops. However, the Budget stops short of presenting a comprehensive strategy for cleaner energy and long-term sustainability, which remains a national priority and is essential to meet EU obligations.
Despite these positive developments, the Chamber believes Budget 2026 represents a missed opportunity in several critical areas. The Budget fails to address Malta’s chronic traffic congestion, which continues to negatively affect families, productivity, and business operations. Public procurement reform remains unaddressed. The decision to tax the Cost-of-Living Adjustment (COLA) undermines the measure’s intended purpose of helping employees maintain purchasing power amid inflationary pressures. The continued postponement of auto-enrolment with an opt-out mechanism for occupational pension schemes marks yet another missed opportunity to strengthen Malta’s long-term pension sustainability.
From a macroeconomic perspective, the Budget’s restraint deserves recognition. No new consumption taxes or import duties were introduced, helping to contain inflationary pressures and maintain consumer purchasing power. However, the increase in public debt adds pressure on achieving projected GDP growth and maintaining a reasonable debt-to-GDP ratio. Any rise in debt should ideally fund capital investment that delivers a return on investment (ROI), enhancing productivity, competitiveness, and overall quality of life for all.
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