Budget 2026 increases disposable income for Families, supports businesses to embrace AI but Leaves Traffic Congestion Issues Unresolved

The Malta Chamber of Commerce, Enterprise and Industry welcomes the Budget’s focus on supporting families and improving their disposable income, as well as the social assistance for pensioners and vulnerable persons.

The Malta Chamber also welcomes the measures aimed to address the business community’s transition towards AI adoption, automation, and digitalisation, as well as the continued investment in employee training. These initiatives align with The Malta Chamber’s long-standing call that digitalisation should be prioritized in order to increase productivity and competitiveness on an international level. The 60% capital investment tax credit, the tax write-off incentive, the widening of the micro-invest scheme and the 175% R&I deduction create strong levers for companies to (i) adopt automation, (ii) take up AI and (iii) invest in strong cybersecurity frameworks aimed at modernising their operations and improve supply-chain visibility, intended to increase efficiency and efficacy.

Other areas where The Malta Chamber’s advocacy has borne fruit include Government’s commitment to establish a new logistics free zone near the airport directly linked to the Freeport – this is a strategic step toward positioning Malta as a Mediterranean hub for trade, distribution, and re-export.

With respect to clean energy, The Malta Chamber acknowledges the introduction of a revised policy in respect of photovoltaic installations on industrial rooftops. However, the Budget stops short of outlining a comprehensive strategy for cleaner energy and long-term sustainability, which remains a national priority and to meet our EU obligations.

Despite these positive elements, The Malta Chamber believes that Budget 2026 represents a missed opportunity in several critical areas.

• The Budget fails to address Malta’s chronic traffic congestion, which continues to have a daily negative impact on families, productivity, and business operations.
• Public procurement reform remains unaddressed.
• The decision to tax the Cost-of-Living Adjustment (COLA) undermines the intended purpose of this measure, which is to help employees maintain their purchasing power amid inflationary pressures.
• The continued postponement of the 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 standpoint, the Budget’s restraint deserves recognition. No new consumption taxes or import duties were introduced, ensuring inflationary pressures remain contained and consumer purchasing power stable. However, the increase in public debt, puts pressure on hitting the forecasting of GDP growth to maintain a reasonable debt-to-GDP ratio. Any increase in debt should be on capital investment which gives the country the return on investment (ROI) required for increased productivity, enhanced competitiveness and a better quality of life for all.