A new Nationalist government would again raise income tax ceilings so that people would pay less tax, Finance Minister John Dalli pledged yesterday.

Reacting to a comment by Labour leader Alfred Sant in the morning, Mr Dalli said this was no election gimmick.

"We have long been saying that we want to have an efficient tax collection system so that we can reduce income tax across the board. We have started doing that and will continue to do it. This will not be a one-off, but a permanent reduction from which people will continue to benefit for years to come," Mr Dalli said.

Referring to the Labour Party's proposed two-month income tax holiday, Mr Dalli said that people who could think "immediately saw through such a gimmick. All constituted bodies, except for the General Workers' Union, which is Dr Sant's poodle, said it was a gimmick".

Mr Dalli said it was absurd to think this so-called tax holiday would kick-start the economy. All it would do would be to increase consumption for a very limited period and as most of the goods sold were imported, there would be a lot of leakage of this money and little, if any of it, would go into productive activity.

"If you analyse how cheaply Dr Sant is trying to buy people's votes, it's enough to consider that those earning up to Lm4,500 would be getting back Lm5 in all," he said.

Mr Dalli said the government's budgetary measures had already given back to people more than what Dr Sant was promising to give them for two months.

"What happens after those two months no one knows, as Dr Sant refuses to say," Mr Dalli said.

Dr Sant, he said, had declared that the Lm20 million Malta was incurring because of its EU membership bid would make up for most of the Lm25 million cost of the tax holiday.

"The government has spent only Lm6 million because of EU accession. The rest of the money was actually given to us by the EU to help us implement the necessary change," Mr Dalli said.

"The joke being circulated via SMS which says 'With Dr Sant, first two months no income tax, the third month no income', is not a joke but reality.

"There would be an economic disaster. And people in the Labour party know it. That's why they are promising a wage freeze, which brings with it a freeze in pensions," Mr Dalli said.

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