An analysis of public finances carried out by Leader of the Opposition, Joe Bossano, has concluded that the Gibraltar government may be forced to cut spending or raise taxes to cover its budgetary commitments, the Gibraltar Chronicle reports.
The report describes how Bossano’s prediction last year that expenditure increases would outpace revenue and growth is now a reality and has resulted in the “biggest ever” budget deficit of £7.3 million.
Bossano believes that the current situation will force the government to choose between further cuts in spending or raising additional revenue.
The tax measures announced by Chief Minster Peter Caruana in the 2004 budget consisted mainly of additional levies on tobacco and alcohol, plus an increase in fuel duty and a restoration of the 6% import duty on computer hardware and software.
Caruana stated that Gibraltar’s economy remained in good shape despite major external challenges.
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