Campaigns focus on economy and taxation

Both the Malta Labour Party and Alternattiva Demokratika have shifted attention in their electoral campaigns to matters of economic interest. Taxation featured as the particular interest in this week of political campaigning.
Labour is preparing its plans for a government that would be controlling the tax burden, Sant revealed in a press conference earlier this week.
It is pointing its finger at the PN’s ‘obsession’ with the EU, which Sant said had incurred a tax increase of as much as Lm120 million annually:
"We aim to control the tax burden in a way that it will remain below the margin of economic growth. When the economic situation is under control, we will be in a position to diminish the tax burden."
On VAT, Labour once again reiterated its endorsement of the tax in view of the economic scenario, but pledged to review the tax.
VAT rates will be reviewed to remove negative impacts of the tax on the tourism sectors, essential products and services, education, culture and sports. Income tax rates and consumption tax will not be increased, but work will be directed towards an alleviation of the tax burden over the next five years.
Finance Minister John Dalli recently presented a costing exercise speculating on the added tax burden Labour would have developed had it remained in government for five years after 1996.
Dalli said that in two years, the MLP government of 1996-1998 had collected just a couple of millions less than what the PN government collected between 1998 and 2003. Dalli said that in four and a half years, the PN government had collected Lm64 million in new taxes, whilst the MLP government had raised Lm60 million in just 22 months.
Dalli said no ‘serious’ finance minister could ever guarantee that income tax would not be increased: "My guarantee is that a new PN government will increase the efficiency of the tax-collection system to lessen the amount of tax paid by individuals."
Alternattiva Demokratika too presented its proposals on taxation, saying it would work for the introduction of fairer taxation once in parliament:
"Taxation is one of the measures which the state can use to promote sustainable development in a modern and open economy, in which the private sector has an important role," said Ralph Cassar, AD candidate for the fifth and seventh districts.
The tax burden on income and economic initiative should be reduced and shifted to activities harming the environment and wasting the island's limited resources, he said.
Cassar suggested that the non-taxable income ceiling should increase to Lm4,000 for singles and Lm5,000 for married couples. The Lm3,000 limit on part-time work, which is taxed at the fixed rate of 15 per cent, should be increased to Lm4,000.
Cassar said VAT on products which damage the environment should be higher than 15 per cent, while VAT on eco-friendly products should be lower. VAT on restaurants should be reduced to 10 per cent for a positive impact on the tourist industry.