"Everybody knows about the attacks made in the past few days on me and my family. I have nothing to fear because I am clean," Muscat told a large crowd in Valletta for the annual May 1 labour day celebrations.
Malta currently holds the rotating presidency of the European Union and will do so until June 30.
Muscat has been battling fresh allegations that a third Panamanian offshore company belongs to his wife.
Having an offshore company is not illegal but it is often associated with money laundering schemes. Michelle Muscat has strongly denied the accusation and although a probe has been launched it is unlikely to conclude before the poll.
"My duty is not just to protect myself and my family but also to safeguard my country, and I will not tolerate a situation where jobs are lost because of uncertainty," said the prime minister, calling the snap election a year before the scheduled end of his first term.
Muscat was elected with a strong majority in 2013 but his tenure has been riddled with allegations of corruption and mystery dealings with countries such as Azerbaijan.
Thousands took to the streets last week to protest against corruption after an investigation revealed hidden offshore companies of Muscat's energy minister, Konrad Mizzi, and his chief of staff, Keith Schembri.
Muscat was subsequently criticised for failing to take decisive action against him and Schembri.
The prime minister has, however, delivered what he calls "an economic miracle", with the first national budget surplus in 35 years, record low unemployment and steady economic growth.
Last month Malta's left-of-centre government survived a parliamentary no-confidence vote over the Panama Papers scandal.
Following that endorsement Muscat had said it "gives us the energy to continue to work hard and achieve results."
The Panama Papers affair involved a massive data leak from the Mossack Fonseca law firm that revealed secretive offshore entities used by many of the world's wealthy to stash assets and in some cases evade taxes and launder money.
The leaks have created problems for political figures in many countries around the world.
Spanish industry minister Jose Manuel Soria resigned last month after he was shown to have connections to offshore companies that he had initially denied.
Iceland's prime minister Sigmundur David Gunnlaugsson was forced to resign after it emerged he had huge amounts of cash stashed in the British Virgin Islands.
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