After the last Budget Alfred Sant declared ad nauseam that we now had an inheritance tax of 35 per cent. Newspapers, and The Sunday Times in particular, have been full of letters denouncing this measure. And I too listed it as one of the middle class grievances that cost this government the third seat it should have got in the European parliamentary election.

Surely but slowly there have been some reactions from Government to clarify what the measures actually are. They are in fact still slightly unfair but nowhere near as bad as people thought.

But let Government first spare a thought for what an inheritance or a property inheritance is. For most of us it just means inheriting the house we grew up in with our parents. For most of us whose parents are not yesterday's big contractors or the very wealthy it means inheriting one family home.

Most of us over 35 were not brought up with very well off parents. Malta has changed incredibly in the past 20 years, and people's spending power even more so.

So most of us actually saw our parents make quite a lot of sacrifices, perhaps to send their children to fee-paying schools and to make ends meet.

There was little waste when I was being brought up. My parents were children in the war and I think those who experienced any of those hardships have a slightly more careful approach to how little your money is worth than many young ones today.

It is this generation that may soon be inheriting property. A generation whose parents were not that well off or who did not have too many extras, but who had one nice family home, all paid for after being taxed, etc.

Any government therefore needs to handle this situation with care. The last Budget did not do that! We all quite naturally felt miffed at having to pay any tax at all on something which is ours and our parents' by right - the family home. It is something our parents paid for after paying their taxes too, after all

I agree that taxes have to come from somewhere but many of those who are approaching retirement today and are about to inherit the family home do not, in reality, want to pay anything at all

And they have a point.

With the new system as introduced you now have to pay five per cent when you inherit. Now again, that is unfair on many who do not have this to pay. And if this is the family home they have been living in, why on earth should they?

We now have an incredibly bizarre situation where those who rent privately and have children living with them do not pay at all as there is this wrong so-called right of inheritance. So the children inherit the right to go on living there and pay no tax!

And yet if your parents own the property and leave it to you, you have to pay five per cent when you inherit it. If this is incorrect I am sure the new team at the Ministry of Finance, which include both the very successsful Parliamentary Secretary Tonio Fenech as well as the Prime Minister himself, will correct this terrible anomaly by the next Budget.

The good news I leave to last, although some improvements are needed here too.

After you inherit and pay this five per cent most of us (particularly if there is more than one sibling wanting to sell) you then only pay this 35 per cent tax on the difference between what you declared your property was worth when you inherited it and what you sold it for.

To give a simple example: if you inherit a property worth Lm90,000 and then sell it on for Lm100,000 you only pay 35 per cent on Lm10,000.

I imagine this was done to stop people underdeclaring when they inherit! And yet you are being encouraged to do this by having to pay five per cent the moment you do!

The middle classes are not stupid and do understand the need for taxes, but they cannot be hit both sides simultaneously.

My suggestion would be this:

There should be no tax on your family home just because you inherit it or perhaps no tax at all on the first Lm75,000. If there is, say, a one per cent charge, this can be paid later when property is sold. If you then sell on, there should be a capital gains tax of say only ten per cent (i.e. only on the profit made). Equally, those who argue that all forms of capital gains should be taxed are missing out on one core middle class value.

And that middle calss value relates to all they have put into their home. These are not people who have had free housing for years courtesy either of a government flat or the rent laws. They worked hard and paid through their noses (in a time when incomes were not high) and to tax that at all is already viewed as unfair; to tax it like any other capital gain is just not acceptable even though you will only be taxed on your profit and not on the value of the whole property

If one wheels and deals in property and has to pay a tax on it, that's one thing. But a capital gains tax on our own family home is just not palatable.

The lesson in all this: we need a government that listens more and thinks more like Malta's huge middle classes (who are not only living in two districts!). We also need a sensible Opposition that presents things truthfully so battles can be fought on things which really exist and not on fantasies!

This government needs a massive and efficient PR and marketing campaign to right the wrongs brought about by Labour's misrepresentations. You cannot just sit back and assume that the right message will filter through and that nobody believes Alfred Sant. That tactic will lead to more losses for the PN and more gains for Labour - something the middle classes do not want at all either...