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PN’s tax plan discriminatory against employed workers, Muscat warns

Joseph Muscat criticises PN's plans to slash income tax for self-employed people and enshrine in the Constitution the obligation for governments to register a balanced budget 

tim_diacono
Tim Diacono
16 May 2017, 1:11pm
Prime Minister Joseph Muscat warned that the PN's proposal will discriminate between workers. Photo: James Bianchi/MediaToday
Prime Minister Joseph Muscat warned that the PN's proposal will discriminate between workers. Photo: James Bianchi/MediaToday
The Nationalist Party’s plan to slash income tax for self-employed people to 10% of their earnings will discriminate between workers, Prime Minister and Labour leader Joseph Muscat has warned.

The PN is proposing a 10% rate of income tax for all self-employed people and small businesses on their first €50,000 in profit, in an attempt to stimulate the economy and reduce tax evasion.

However, speaking to journalists at the end of a press conference, Muscat warned that the proposal will discriminate between different categories of workers, in favour of self-employed people.

“Essentially, it will mean that a doctor in the public service will have to pay more tax than a self-employed doctor, even if he earns less money,” he said.

He also criticised the PN’s proposal to introduce a clause in the Constitution that will oblige governments to present balanced budgets barring exceptional circumstances, such as recessions.

“Malta is already a signatory to the EU’s Fiscal Responsibility Act, but the idea of having a balanced budget enshrined in the Constitution was abandoned in Europe a long time ago,” he said. “Only allowing the government to register a deficit in the event of a recession is like allowing a patient to die before giving him medicine.”

He pledged that the Labour Party will not engage in an “auction of proposals” but instead stick to costed and realistic proposals – such as its promise of tax refunds for people earning up to €60,000.