Issue link: https://maltatoday.uberflip.com/i/1542585
MIDDLE-INCOME house- holds and dual-earner fami- lies with multiple children are expected to be the main ben- eficiaries of the government's newly announced income tax reform for parents, according to a study by Central Bank of Malta economists Glenn Ab- ela, Ian Debattista and Noel Rapa. The economists conclude that the design of the reform channels the largest relative gains towards households in the middle of the income dis- tribution, rather than those at the lower or upper ends. The measures, which will be intro- duced gradually until 2028, are therefore likely to have their strongest impact on families positioned around the centre of the income scale. Largest gains concentrated in the middle of the income distribution Using the EUROMOD mi- crosimulation model, the au- thors of the study assessed both the distributional and macroeconomic effects of the reform over its phased imple- mentation. Their analysis shows that households in the fifth income decile – the precise midpoint of the income distribution – are projected to register the largest relative improvement in living standards. By 2028, equivalised disposable income for this group is expected to increase by 2.97%. According to the economists, lower-income households al- ready benefit from existing tax-free thresholds and allow- ances, which limits the scope for further gains from the re- form. At the other end of the income scale, the benefits for higher earners taper off once income exceeds the thresholds set under the parent tax com- putation. Achieving Results for Malta and Gozo in Europe WWW.MALTATODAY.COM.MT WEDNESDAY EDITION €1.00 WEDNESDAY • 14 JANUARY 2026 • ISSUE 973 • PUBLISHED EVERY WEDNESDAY AND SUNDAY CONTINUES PAGE 3 Biggest tax gains for middle-income families CONTINUES PAGE 3 Murder trial underway 17 years after alleged shooting THE trial of Stephen Caruana for the murder of his wife's lover has kicked off on Tuesday, 17 years af- ter the alleged murder. The murder dates back to Decem- ber 2008, as the victim, 28-year-old Neville Baldacchino, was shot dead in the Caruana household. Caruana is accused of murder and the use of a gun in a home. He de- nies all charges. According to the bill of indict- ment, the incident took place at approximately 1:00 am on 19 De- cember. The reform is expected to cut state tax revenues by €170 million by 2028, with its impact depending on whether families spend or save the extra income The report said that the largest relative gains will be towards households in the middle of the income distribution, rather than those at the lower or upper ends MATTHEW FARRUGIA mfarrugia@mediatoday.com.mt EDITORIAL • PAGE 11 PARENT TAX REFORM JAMES DEBONO jdebono@mediatoday.com.mt