Malta Opposition Slates Budget Measures

by Lorys Charalambous, Tax-News.com, Cyprus

04 December 2001

The Times of Malta online news service has reported on a budget debate between opposition finance spokesman Leo Brincat and the Minister of Finance, John Dalli, who was accused by Mr Brincat of imposing a heavier tax burden without providing people with better services and charged that John Dalli's budget will prevent people from adding to their savings as well as expanding the deficit.

Mr Brincat also criticised the Finance Minister for allegedly failing to tackle tax evasion and public spending, and he claimed the biggest inconsistency was when Mr Dalli urged taxpayers to reach an agreement with the Tax Compliance Unit which, on several occasions, has stated that it is not prepared to negotiate.

The opposition spokesman continued to berate the unfortunate Minister with issues on the deficit. It was reported that the deficit had reached Lm81.5 million by September this year and Mr Dalli had said it would reach Lm82.4 million by the end of year. But Mr Brincat claimed that as he understood it, in that case the government's tax revenue in the last quarter of the year would have to reach Lm192 million, a third of the total for the year.

It was more likely, he claimed, that on the basis of past performance, this year's deficit would actually be closer to Lm110 million, and not Lm82.5 million.

Furthermore, argued Mr Brincat, the government had predicted an increase of Lm2.3 million in tax revenue from gaming, but the new Gaming Authority aims to spend Lm500,000, almost a quarter of all revenue. Mr Dalli replied that more revenue would be raised as the Lotto Department, currently costing around Lm1.8 million, would be privatised.

Mr Dalli also said that the government was not increasing taxes but raising tax revenue through improved tax collection. In response to the complaint over the Tax Compliance Unit, the Finance Minister said the Unit is discussing taxpayers' income on an individual basis; enforced tax assessments only applied to the services sector. As for the deficit criticism, Mr Dalli replied that this was the fourth out of six planned budgets to tackle the deficit and the September 11 attacks had forced the government to improve conditions for firms to allow them to re-invest their profits into their businesses.

Recommended