Maltese FOI Urges Immediate Action To Preserve Investment Levels

by Robert Lee, Tax-News.com, London

16 January 2004

Malta’s Federation of Industry has appealed to the government to preserve taxes and take “drastic measures” in order to enhance the jurisdiction’s international competitiveness.

The FOI cited recent job losses in the manufacturing and tourism sectors as a sign that all is not well with the Maltese economy despite healthy levels of investment. “It is an indicator that enterprises are suffering in the global market place, losing market share and perhaps even the will to invest in Malta. This is indeed serious,” the organisation observed.

“Moreover, one cannot lose sight of the fact that the situation in Malta’s public finances, and the accompanying and continuous upward push of taxation, is contributing to a diminishing disposable income in the hands of workers and entrepreneurs alike,” argued the FOI.

The organisation’s economic critique continued: “It is becoming increasingly difficult for firms to increase their prices on the market whilst their profitability is being squeezed between increasing costs and resistance by the market to accept higher prices for goods and services.

“In the meantime, the Malta currency is becoming stronger and rendering exports more expensive to sell, whilst productivity increases are being surpassed by wage increases. In these circumstances no entrepreneur can be blamed if he shifts his operations away from Malta,” the FOI noted.

The body urged that the government, and the trade unions, take “drastic and immediate measures” to ensure future levels of investment are maintained.

Recommended