|
 |
|
If there is an issue that elects or brings down governments, it has got to be tax.
Tax regimes and tax reform encourages voters and swings them to and fro from political stables.
Tax relief on the other hand encourages businesses big and small to move on, to invest and to risk.
That is the nature of business - the ability to generate and be productive.
Unfortunately in the case of businesses there has been little or no positive reform and too little in the way of promoting business growth.
That we are adventurous tax evaders and have always been is a matter of fact. It comes about due to a combined lack of respect to the State, supported by a Latin and inward looking mentality. Altruism is usually not in the minds of Southern Europeans.
Needless to say tax evasion is not endemic to Malta.
There is little to make us believe that the vast bulk of tax-payers are the traditional salaried workers but there are also businesses which are better known as sitting ducks for the tax man; a result of their transparent operational structures.
Government statistics have argued that since the tax revenues have increased, there is good reason to believe that the economy is facing an upward trend. This has to be confronted with another reality linked to better tax collection.
The government has been very good at tax collection, but this does not mean that the economy is doing better.
This edition of Business Today describes in some detail the different bands and the percentage in terms of the global tax contribution.
The official stats reveal that 18,926 tax payers or 15.7% of all those who choose or opt for a single computation declare earnings over Lm6,750. In the joint computation, 12,221 joint tax payers or 16.5% declare earnings over Lm8,501.
These segments have also made the biggest savings in a year from the recent reform in the tax bands, as declared in the 2007 budget; Lm155 and Lm243 a year.
There is the other segment of tax declaration linked to companies who continue to act as tax collectors for the VAT department and who still suffer from the perennial problem of cash flow and finally the problem with declaration of profits in a company.
The combined result of collecting monies and the target of instilling a good tax base has lent itself to a more rigorous and action oriented tax compliance. There is nothing wrong with this. But not when the economy is facing severe hurdles.
Tax compliance is correct but the fundamentalist approach to many businesses in such an awkward period has unleashed an uncertainty that brings back dark memories of the ex-officio days.
This is no exaggeration.
The fundamental problem facing government is its belief that the economy is sound and that we are on the right footing. Statistics may show that but it is not the real picture.
The government fixation on tax collection will land it with less entrepreneurial spirit and more grumbling. The small businesses believe that they are being besieged.
This is the time to give some breathing space.
SmartCity or no SmartCity
SmartCity may not or not be a wishful dream. If we are to take the IT minister Austin Gatt’s comments and inference in parliament on the subject, there is a clear and doubtful feeling in the air.
It is a depressing piece of news. It will definitely lead to a unhappy view of Nationalist politics sending their ratings into a downward trend. It will add a feeling of negativity in the market, allowing for more speculation that the future is not as rosy but rather gloomy.
The issue ahead of us is simple, we wish for this project to succeed. But not at the cost or risk of giving in to unreasonable demands by the would- be Dubai investors.
Low cost carriers
The arrival of low cost carriers needs no introduction in this newspaper. It is a welcome move. The low cost carriers will increment the flow of tourists but it is not the only solution.
The other solutions are linked to service, quality and cleanliness. We cannot expect people to return to these Islands if they are greeted by uncouth individuals and downgraded environments, whether in suburbia or in the natural landscape.
Tourism remains an important segment of our economy, allowing for other small but important sectors that together contribute significantly to employment figures and revenues for government.
European Union blues
The good feel factor of European Union integration is definitely not being felt within the business sector. The reality is that many small businesses are finding it more difficult to operate and some even talk about scaling down or closing down.
Many made in Malta companies have not been able to rise above the strong competition from the inward flow of new products.
Wine companies are a case in point.
Of more concern is the failure to reduce consumer prices, a change that was noticeable only after accession.
Parallel to all these factors, the imposition of directives has proceeded but only in those spheres which do not create major upheavals.
Someone needs to inject some adrenaline into the European dream. |
