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9 maltatoday | TUESDAY • 29 OCTOBER 2024 BUDGET2025 Explained: How your income tax brackets will change in 2025 IN one fell swoop, the govern- ment will widen the income tax bands in 2025, with workers expecting to save between €345 and €675. In a major boost to disposable income, the government is ef- fectively cutting income tax by adjusting the tax bands in the three tax categories – single, married and parent. Those paying income tax at the single rate will not pay any tax on the first €12,000 earned. In the married and parent rates, the first €15,000 and €13,000 earned respectively will not be taxed. The 15% band will widen to €12,001-€16,000 at the single rate, €15,001-€23,000 at the married rate, and €13,001- 17,500 at the parent rate. Lastly, the 25% will be calcu- lated on the amounts earned up to €60,000, after which point a 35% tax rate will apply. The income tax cuts are more than what was promised in the Labour Party's 2022 manifes- to. The party had, at the time, quantified the tax cuts at €60 million. The Budget 2025 cuts will cost the government €140 million. A €40m injection between 2013 and 2015 The last tax cut happened in 2013 when the top income tax rate was cut from 35% to 25% over a three-year span for those earning below €60,000. The measure left more than €40 million in people's pockets. The tax cut had been planned by the outgoing Nationalist ad- ministration, but it never got the chance to implement the measure because Budget 2013 was defeated in parliament precipitating an election. The incoming PL government held an emergency budget and chose to retain the tax cut pledge even though it was not part of its electoral manifesto. Check out MaltaToday's salary calculator online to find out how the tax cuts will impact you. It's one of life's few certainties, but it's set to be calculated differently next year. Here's what's changing. NICOLE MEILAK nmeilak@mediatoday.com.mt Computation 2024 Single Married Parent Income Rate Subtract Income Rate Subtract Income Rate Subtract 0-9,100 0% 0 0-12,700 0% 0 0-10,500 0% 0 9,101- 14,500 15% 1,365 12,701- 21,200 15% 1,905 10,501- 15,800 15% 1,575 14,501- 19,500 25% 2,815 21,201- 28,700 25% 4,025 15,801- 21,200 25% 3,155 19,501- 60,000 25% 2,725 28,701- 60,000 25% 3,905 21,201- 60,000 25% 3,050 60,001+ 35% 8,725 60,001+ 35% 9,905 60,001+ 35% 9,050 Computation 2025 Single Married Parent Income Rate Subtract Income Rate Subtract Income Rate Subtract 0-12,000 0% 0 0-15,000 0% 0 0-13,000 0% 0 12,001- 16,000 15% 1,800 15,001- 23,000 15% 2,250 13,001- 17,500 15% 1,950 16,001- 60,000 25% 3,400 23,001- 60,000 25% 4,550 17,501- 60,000 25% 3,700 60,001+ 35% 9,400 60,001+ 35% 10,550 60,001+ 35% 9,700 Opposition misreads debt figures, minister says as burden drops to 49% FINANCE minister Clyde Caruana be- rated the Opposition over its misleading statements over the state of the economy, based on the rate of the growing national debt. The Nationalist Party often issues mis- sives over the increase in the country's debt in terms of the nominal millions by which it increases every year. But Caruana accused the PN of proffer- ing an incomplete analysis because at no time do they mention the rate at which the economy grows, and how this affects debt burden. Since 2013, the Maltese economy has grown by 200%, from €7 billion a year to over €22 billion today. "The growth of the economy has therefore led to a reduction in the debt burden over the years," Caru- ana said. As a proportion of GDP, debt is expect- ed to stand at 49.5% in 2024 and 50.1% in 2025. "A pandemic has just passed, we have paid out large subsidies after explod- ing energy prices on international mar- kets and reducing our debt burden to 50% – 10 percentage points below the 60% set by European rules," Caruana said. "When Labour was elected to gov- ernment back in 2013, the debt burden stood at almost 70% of GDP. Today af- ter 12 years and everything we've gone through, this figure has dropped below 50%. Facts and numbers speak for them- selves." Caruana also said tax collection and en- forcement had grown exponentially in the first six months of 2024, with €300 million in tax arrears collected. So far, over 1,200 payment agreements have also been concluded with taxpayers with tax balances, with the percentage of tax returns sent on time rising from 73% in 2023 to 93% in 2024. An unprecedented investment of €68 million will be spent over a decade to install a digital and integrated IT system that combines various revenue-collecting functions. "Eventually, through this digital plat- form, anyone who is due to pay tax will be able to verify their tax status at the time," Caruana said. MATTHEW VELLA mvella@mediatoday.com.mt Since 2013, the Maltese economy has grown by 200%

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