Malta will be bankrupted by endless list of promised tax cuts, say AD

The tax refunds, credits and deductions promised by both parties as part of their electoral campaigns risk bankrupting the country and will leave Malta heavily exposed to macroeconomic fluctuations, say Alternattiva Demokratika, as it proposed a shift in tax burden focus off the worker and on to businesses that cause pollution.

Addressing a press conference near the ruins of the  Royal Opera House in Valletta this afternoon, AD Chairperson, Prof. Arnold Cassola expressed concern at the lavish promises being made by both the Partit Laburista (PL) and the Partit Nazzjonalista (PN), warning that Malta would end up like the opera house, "without a roof over its head."

 “Joseph Muscat has promised gradual tax refunds for 190,000 people earning as much as €60,000. Tax on part-time work will be reduced from 15% to 10%, which also applies to self-employed. Small businesses with incomes of up to €20,000 could benefit from a VAT exemption up from the current €14,000 threshold. The micro-invest programme would be raised to maximum assistance of €50,000 per company and €70,000 in Gozo,” Cassola pointed out.

The lengthy list of tax rebates also on health insurance, extended tax credits to pharmacies delivering free medicines, tax exemptions of up to €50,000 on parents who use private childcare, a €30,000 tax rebate on capital expenditure promised to employers who invest in teleworking were all highlighted by the Green party. 

“Farmers and fishermen are being promised that they will not pay any income tax if Labour is returned to government. Labour said it would be exempting the elderly from the current 15% withholding tax on bank deposits up to €1000 and provide parents with a tax credit of up to €2000 a year to encourage saving for their unborn children's pension plan.”

Cassola added measure after measure to the list; special tax rates for separated or divorced persons who still pay maintenance to their former spouses, 3 year tax exemptions for businesses which relocate to Gozo, €5000 tax credits to parents of Gozitan students at university. “Then there are the huge expenses promised on all kinds of roads flyovers and undersea tunnels.”

The PN had made a number of risky promises of its own, “not to be undone in this race to the bottom,”AD candidate Ralph Cassar observed. The Nationalists had promised subsidised interest on home loads through tax credits, he said, whilst retaining the current exemption for first time home buyers, Those who would rent property to persons on the social housing waiting list would be exempt from tax on rental income after entering into a 10-year rental contract. 

All pensions would be exempt from income tax under a PN government and young Gozitan families who remain or relocate to Gozo would receive a €10,000 grant. Businesses opening on the sister island would benefit from income tax exemptions of hundreds of thousands of euros over a three- year period and  Gozitan startups would be provided with a grant of up to €25,0000, as well as having the employers' national insurance contribution reimbursed during the first two years of operation. 

The PN has further promised SSC refunds for workers in the tourism sector, he said,  and proposed a maximum 10% income tax rate on workers earning under €20,000 and reduce income tax on part time work amongst a slew of tax-reducing incentives offered to various other segments of society.

“Not to mention the billions upon billions promised on roads, flyovers, undersea tunnels and whatnot. Again it goes on and on.”

“I think we are all going to wake up on June 4th singing jingle bells, because Christmas would have come early,” Cassola said.

“where are the funds for better schools, education, investment in healthcare, the elderly and investment in clean energy and mass transport going to come from if all these rebates are going to be applied?” Cassar asked. 

There should be a debate on tax justice, he said, “but this is not the way to go about it.”

“We are interested in shifting the tax burden off the worker and on to businesses and industries that pollute, such as construction,” Cassar said.

“If we exclude all those who are evading taxes in Panama, Switzerland or the British Virgin Islands, if we exclude all those who PN and PL propose to exclude from paying any taxes, who in this country of ours is going to pay any taxes?” A discussion on taxation was indeed necessary, he said, but should be geared towards more social justice and a cohesive community. 

“Shooting proposals left, right and centre to please everyone is irresponsible. PL and PN are endangering the provision of good public services through their Father  Christmas politics.”