Finance Minister Clyde Caruana has proposed a new tax rate to incentivise families to have more than one child, aiming to address Malta’s declining birth rate and its demographic challenges.
In a recent Parliament speech, Caruana emphasised the need for drastic measures to alter Malta’s population trajectory, warning that current efforts, such as increasing the children’s allowance by €250 a year, are insufficient.
Caruana stressed that while such allowances help families raise children, they do not incentivise having more.
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To address this, he suggested introducing a new tax band for families with multiple children, in addition to the existing single, married, and parent rates.
This new system would provide families with thousands of euros in tax relief each year for having more than one child, offering substantial financial support to encourage larger families.
The minister highlighted that such measures are necessary to ensure Malta’s long-term demographic and economic stability, as the country faces an ageing population.
With birth rates on the decline, Caruana urged the government to act swiftly, noting that financial incentives through the tax system could play a critical role in reversing the trend and securing a sustainable future for Malta’s population.
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