Budget 2026 was delivered at a crucial juncture for Malta's economy - a time when the country must consolidate its resilience and shift decisively from growth based on quantity to one founded on quality, innovation, and long-term competitiveness.

In the months leading up to the Budget, The Malta Chamber engaged extensively with the Government. I would like to acknowledge the openness shown by both the Minister for Finance, Clyde Caruana, and the Minister for the Economy, Silvio Schembri. Both ministers demonstrated a genuine willingness to listen and engage with the private sector. This dialogue is essential if we are to ensure that policymaking reflects real business needs and national priorities.

The Malta Chamber's Pre-Budget Document 2026 presented a roadmap based on the pillars of Envision 2050, emphasising fiscal discipline, sustainability, innovation, and productivity. We are pleased that a number of our suggestions have been incorporated into the 2026 Budget.

One of the most welcomed measures is the 175% tax reduction for research and innovation, combined with the two-year accelerated write-off for digitalisation and AI investments. This directly builds on our proposal for a 150% deduction and advances further by incentivising companies that invest in technology and innovation.

To illustrate its impact, consider a Maltese company that invests €120,000 in automation and innovation equipment. Normally, this investment would be written off over eight years, resulting in a total tax saving of around €42,000. Under the new Budget 2026 incentive, the company can now deduct 175% of the investment (€210,000) and spread it over two years, generating a total tax saving of €73,500 - an additional €31,500 saved, realised six years earlier. This measure provides immediate cash flow support and directly encourages growth driven by innovation.

We also welcome the launch of a National Industry Policy focused on high-value manufacturing and export-led activity - a long-standing Chamber recommendation - as well as the announcement of an International Logistics Hub under a Public-Private Partnership model, which aligns perfectly with our call for improved connectivity and value-added logistics.

Moreover, the ongoing development of the Centralised Due Diligence Repository within the financial services sector is another key measure stemming from The Malta Chamber's proposals. This reform will help reduce duplication, simplify compliance, and boost Malta's competitiveness as a trusted jurisdiction.

However, there are still area where progress was limited or lacking.

First, the Budget once again failed to fully address publicprocurement reform. The Malta Chamber has repeatedly called for the publication of an annual Public Procurement Outlook, a fully transparent contracts register, and a supplier whitelisting system that rewards compliant, ethical operators. These measures are essential to ensure fairness, value for money, and the elimination of abuse in public contracting. While the Budget recognises the importance of good governance, it stopped short of implementing these specific reforms - a missed opportunity to restore public trust and boost business confidence.

Second, Malta still lacks a natiomal transport and mobility master plan that prioritises efficiency, connectivity, and productivity. Ongoing road projects and incentives for electric vehicles are welcome, but they must be part of a coherent strategy that tackles congestion, logistics bottlenecks, and the effects of lost time on business performance.

Third, public sector reform remains largely unaddressed. The Chamber continues to urge the Government to undertake an independent audit of duplication, bureaucracy, and overstaffing within ministries and entities. Public service efficiency must meet private-sector standards if the economy is to grow sustainably.

Despite these gaps, Budget 2026 marks a positive step in the right direction. It demonstrates a shift towards quality growth, fiscal prudence, and innovation - all values that The Malta Chamber strongly endorses. The challenge now is its implementation.

Good budgets are not judged by their speeches but by their delivery. Businesses require predictability, efficiency, and timely implementation. The Malta Chamber steands ready to collaborate closely with the Government to ensure these measures lead to tangible results that enhance competitiveness, attract investment and improve quality of life for all.

If the coming year becomes one of action and accountability, Malta will have taken a significant step towards a smarter, fairer, and more sustainable economy - one that genuinely rewards innovation, integrity, and enterprise.

William Spiteri Bailey is President, The Malta Chamber of Commerce, Enterprise and Industry