Parents with two or more children will receive significant tax benefits to stimulate birth rates and combat demographic decline, the Maltese government reported.
Finance Minister Clyde Caruana, during a speech in parliament, described the extremely low birth rate among the indigenous population of Malta as the country's "greatest challenge." "We need to encourage more families to have at least two children," Caruana noted.
According to Eurostat, in 2023, the birth rate in Malta was only 1.06 children per woman – the lowest among EU countries.
Under the new scheme, parents with two or more children will not pay tax on the first €18,500 of income starting in 2026. By 2028, this benefit will increase to €30,000 per person. The tax benefits will extend until the child reaches 23 years of age.
Malta's Catholic Archbishop Charles Scicluna warned back in September about the "ethnic extinction" of Malta. Although the country is densely populated – about 1,704 people per square kilometer, nearly a third of the population consists of foreign workers and their families.
Caruana also reported that the indigenous population of Malta currently stands at 406,000, of which 24% are over 65 years old. In total, nearly 600,000 people live on the island.
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