Malta will veto any EU-level gambling tax, Prime Minister Robert Abela confirmed in parliament this week, as member states begin staking out positions ahead of negotiations on the bloc’s next multi-year budget.
Abela’s statement directly addresses one of the proposals circulating at the European Council level: a levy on gambling that would feed into the EU’s central budget. For Malta, the stakes are unusually high. Online gaming accounts for more than 10% of Malta’s GDP, making it one of the most concentrated iGaming economies in Europe.
What was said in Brussels
Last week’s European Council summit in Brussels opened preliminary discussions on the EU’s next long-term financial framework. Among the ideas under consideration is a harmonised gambling levy that would generate revenue for the EU’s central budget — a proposal that has been building momentum over recent months.
The summit did not produce binding decisions, but member states began setting out their red lines. Abela used the occasion to draw Malta’s clearly.
Any changes to EU tax rules require unanimous approval from all 27 member states.
That unanimity requirement is the mechanism Malta is relying on. Under EU treaty rules, tax matters require all member states to agree. A single veto kills the proposal. Malta has used that lever before, and Abela’s remarks signal it will do so again if a gambling levy reaches a formal vote.
Abela also confirmed Malta’s continued participation in the Friends of Cohesion group, a coalition of EU member states coordinating positions ahead of formal budget negotiations. The group’s focus is on protecting cohesion funding, which smaller and less wealthy member states depend on, but Malta’s membership also gives it an organised forum to coordinate opposition to revenue proposals it finds damaging.
Opposition backs the government line
The position drew rare cross-party support. Nationalist Party deputy leader Alex Perici Calascione backed the government’s stance, calling for Malta to take an even firmer line in negotiations while also pressing for Gozo’s interests to be protected in any future EU funding arrangements.
That bipartisan alignment matters. It signals that Malta’s veto threat is not a governing-party position that could shift after an election — it is a national position with durable political backing.
Tax justice pressure and the refund mechanism
The government’s stance has drawn criticism from tax justice organisations. The Tax Justice Network and similar groups have repeatedly pointed to Malta’s corporate tax refund mechanism, which allows foreign-owned companies operating from Malta to claim back a significant portion of tax paid.
According to figures cited by campaigners, companies that would have been expected to pay around €1.5 billion in tax in 2022 ultimately paid €216.6 million after refunds were processed — an effective rate well below the headline figure. Critics argue that Malta’s resistance to EU-level tax proposals is inseparable from its interest in maintaining that system.
The Maltese government has consistently defended the mechanism as legal and consistent with EU state aid rules, and has attracted no formal infringement proceedings over it to date.
What the EU gambling levy proposal covers
The EU iGaming tax proposal has been gaining traction in Brussels, driven partly by member states looking for new own-resource revenue streams to reduce reliance on national contributions. A gambling levy is one of several sectoral taxes being floated alongside levies on digital services and financial transactions.
The proposal’s precise structure — whether it would apply to gross gaming revenue, operator turnover, or another base — has not been publicly finalised. What is clear is that any such levy would affect operators licensed in Malta, which hosts a large share of European-facing online gaming companies. Malta is already overhauling its domestic gambling VAT and gaming tax regime from October 2026, adding complexity to how any EU-level measure would sit alongside national frameworks.
Formal negotiations on the next multiannual financial framework are expected to intensify through the second half of 2026, with the gambling levy likely to surface as a specific agenda item as the revenue discussion narrows. Malta’s veto remains available at that stage — but so does pressure from larger member states seeking to close what they regard as tax competition from smaller jurisdictions.
Source: Maltese Government / Parliament
