Total tax revenue during 2008 increased by €76.6 million, or 4.1 per cent over the previous year, and amounted to €1,967.3 million. Tax revenue may be broadly classified under three main headings: indirect taxes, direct taxes and social security contributions.

Indirect taxes are defined as taxes linked to production and imports. In the year under review, these taxes stood at €857.7 million, and contributed to 40.2 per cent of the increase in total tax revenues. This tax category is mainly made up of VAT and taxes on products (including excise duties). Consumption tax stood at €458.4 million, an increase of €38.5 million from last year and represented 23.3 per cent of total tax revenues. On the other hand, taxes on products recorded a decline of €10.2 million.

Direct taxes are current taxes on income and wealth plus capital taxes and other current taxes. Taxes on income are made up of both personal as well as corporate taxes. During 2008, direct taxes increased by €16.2 million, to €757.8 million, making up 38.5 per cent of total tax revenue. This increase was mainly the result of higher returns from corporate tax and personal income tax, up by €18.8 million and €6.8 million respectively, which in part outweighed the fall in other components of direct taxation.

Social contributions are compulsory actual social contributions paid by the employees, employers, as well as the self- and non-employed persons. This category registered an increase of €29.6 million to €351.7 million, the equivalent of 17.9 per cent of the total tax revenue.

The overall tax burden is defined as the total amount of taxes and actual social contributions expressed as a percentage of GDP. During 2008, the tax burden for Malta was 34.6 per cent, a slight decline from the 34.7 per cent recorded in 2007.

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