[WATCH] No quantification yet of Labour’s proposed cut on final withholding tax
Chief spokespersons on finance fail to give sum of revenue lost to proposed cut on final withholding tax.
17 January 2013, 12:00am
Miriam Dalli
Miriam Dalli
2 min read
MEP Edward Scicluna (left) with MPs Karmenu Vella and Charles Mangion.
Labour has yet to announce the full cost of its proposal to reduce the final withholding tax on rent from 35% to 15% and reopen consultation with stakeholders on the Permanent Resident Scheme.
The tax cut is yet another addition to Labour's committee to reduce not just bureaucracy, but also entice businesses to their side with tax cuts for high earners, amongst them non-domiciled residents who transfer their earnings to Malta.
"Labour will announce the how, when and by how much as it did with its announcement for the reduction of utility tariffs," MEP Edward Scicluna said.
Labour's chief spokespersons for finance - MEP Edward Scicluna, and MPs Karmenu Vella and Charles Mangion - today pointed out the irony of Malta's downgrading by Standard & Poor's when the Nationalist government was boasting of having secured the public finances on a sound footing.
"The downgrade was no surprise after five years of economic failure, broken promises, instability and an indifference to the alarm bells ringing around us," Vella said.
"What did Tonio Fenech do after these warnings? Nothing, except come up with excuses."
Vella said taxpayers were paying €250 million in interest for the island's €4.9 billion in national debt, much of which is local.
Charles Mangion said Labour's energy proposal for a gas terminal and new LNG power station addressed both concerns outlined in the S&P downgrade, by reducing energy prices and making businesses more competitive.
Scicluna rebutted claims by finance minister Tonio Fenech that the downgrade had been prompted by Labour's refusal of the budget in December. "What's been downgraded is Fenech's credibility, who has been trying to hide the reality revealed by this downgrade: that our deficit is only under the 3% GDP by a whisker, and that our government debt is at 75%, apart from contingent liabilities at 20% of GDP."
Scicluna also poured scorn over Lawrence Gonzi's claims of having 'created' 20,000 jobs: "We're happy with Malta's low unemployment but S&P has never mentioned the 20,000 jobs allegedly created."
Miriam Dalli joined MaltaToday.com.mt in 2010 becoming assistant editor f...
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@BETTER FUTURE......i fully agree with you but let me remind you two things. (1) the proposal of the 15% witholding tax was copies from the pn budget 2013. (2) dalli was one of the best finance ministers malta had. can you remember what the pl has told dalli and the great opposition raised when he introduced the vat???????? THE LABOUR PARTY IS NEVER CONSISTENT IN WHAT HE SAYS.
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Who says if this measure would mean a loss in revenue for the national coffer???
Is it possible that with these measures more residents would be attracted to come and live here thus negate any loss in tax revenue?
So why title the article showing a negative image of this proposal?
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Do you remember when John Dalli reduced and introduced a final withholding tax on bank interest to/of 15%? The reason was that Dalli had studied the facts, and realised that even with easily traced, declared, bank interests, taxpayers were declaring well less than half of this income. Dalli being a practical person (and I must add a great loss for the Maltese nation) introduced the FWT @ 15% so the Government would net more revenue, and the taxpayer would feel the pinch less. I would imagine this applies in greater doses for rental income!!
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Labour has so far showed that it has costed all the savings or expenditure it will be making if elected with all the proposals it is making. I am sure it has done the same with this particular proposal and will announce the how/when/how much soon.
We also need to start looking at the bigger picture (going beyond 5 years!). Such proposals would yes have an imemdiate negative impact (in terms of revenue) but would also have an immediate positive impact on the economy which would last for a very long time and which would more than offset the initial loss in revenue.
