Advanced implementation of the Tax Department’s new Tax For All (TFA) IT system and countrywide units across all tax categories will further boost state tax revenues in 2027.
According to Ministry of Finance estimates, the rate of additional tax relative to total taxation will reach at least 5% next year. Tax collections reached €4.47 billion by the end of July 2026, while total tax revenues for 2025 stood at €8.1 billion. Tax Department revenues increased by 8.5% (€7.43 billion) compared to 2024 and by 19.8% compared to 2023 (€6.73 billion).
Tax revenues have grown 60% since 2021, when collections stood at €5 billion. Last year saw the largest increases in income tax (up €307.22 million), VAT (up €248.87 million), and capital gains tax (up €44.11 million).
The Tax Department also collects General Healthcare System (GHS) contributions, which are remitted monthly to the Health Insurance Organisation (HIO) and excluded from tax revenue totals. GHS contributions collected in 2025 totaled €104.3 million, compared to €94.2 million in 2024.
According to a ministry explanatory note, additional income tax imposed on individuals and legal entities following Tax Department audits is calculated as a percentage of total income tax assessed. Pending the full rollout of TFA and targeted case selection, the yield for 2024 stood at 2.14%.
Compliance measures cover all taxpayer obligations, from register entry to accurate filing and timely payment. Monitoring, verification, and enforcement play a key role in managing compliance under current legislation.
To achieve high voluntary compliance, the Tax Department is working to reduce compliance time, apply tax law uniformly, establish nationwide units, and implement TFA.
The department is broadening the tax base by updating the tax register and using data collected from multiple sources. Clearing backlogs and using risk-based controls will boost efficiency and objection management.
Electronic payments accounted for 95% of Tax Department collections. A dedicated unit manages tax debt to ensure uniform and timely resolution.
The expansion of electronic payments via the Tax Portal and TFA allows taxpayers to meet obligations independently. Debt settlement options allowing installment payments also boost revenue and reduce arrears.
Last year, electronic payments reached 96.8% of total collections, up slightly from 96.3% in 2024. Automatic entries upon declaration filing and taxpayer familiarity with TFA drove the increase.
At the end of 2025, around 60% of immediately due tax debts were under four years old. Current debts under one year accounted for 29.5%, while debts aged one to four years accounted for 29.9%. Enhanced services aim to facilitate compliance and reduce legal action.
Under the ministry strategic plan, the department is modernising infrastructure through consolidated District Office buildings and promoting transparency through a Code of Ethics and Conduct.
The Tax Portal, TFA system, public guidance material, and systematic compliance tracking increase efficiency, trust, and compliance, the ministry said.
The tax reform launched on 1 January remains an integral part of broader economic policy.
The overhaul aims to boost economic competitiveness, distribute tax burdens more fairly, simplify the system, and align with international developments.
The framework supports job creation, investment, post-energy crisis recovery, cross-border investment, and sustainable growth, according to the Ministry of Finance.
Further tax framework modernization based on European and global standards remains a landmark government initiative.
Tax returns for the 2026 tax year filed next year will incorporate tax deductions based on family composition and income.
