Corporate tax must be lowered for individuals too, Bernard Grech insists

Grech argues that company dividends would still be subject to a 35% corporate tax under the Labour Party's pledge

People receiving company dividends would still be subject to a 35% corporate tax rate under the Labour Party's proposal, Nationalist Party leader Bernard Grech insisted on Thursday.

During an election activity, Grech pointed out that the Nationalist Party is going a step further in their proposal and will lower the corporate tax rate to 25% for companies and individuals. The Labour Party has pledged to lower the tax for companies only. 

"People who understand tax knows this would be difficult - when individuals are paid dividend they would still pay a 35% tax rate," Grech said. "Even when we put forward a good measure, they just do the same thing half-heartedly."

Companies are subject to income tax and tax on capital gains. Currently, local companies are taxed 35% on their chargeable income, which includes taxable income and capital gains.

In this sense, companies are subject to tax in the same way that an individual would be subject tax. 

The Labour Party pledged to lower the corporate tax rate to 25%, down from the current 35% rate, one the first €250,000 profits earned in the year. However, it never clarified whether this rate would be applicable on dividends for individual shareholders.

In their manifesto, the Nationalist Party is proposing to lower the highest tax rate to 25%, both for companies as well as individuals, over a five-year period. 

Earlier in the day, during the University Debate, Grech invited Prime Minister Robert Abela to join him for a national march in solidarity with Ukraine. Abela is yet to respond to this invitation. 

Grech criticised Abela's absence on the issue. He said the Nationalist Party is the only party that takes a stand on international issues, recalling the Nationalist government's actions during the Libyan crisis in 2011.

He also criticised Abela for sayin he felt lucky to live in Malta when the Russian invasion broke out.

"Even things happening 40 hours away from us can affect our country. That's why we need mature and serious leadership," he said.