Alternattiva Demokratika thinks the government should review the taxation measures announced in the budget with a view to relieving small businesses and imposing heavier taxes on banks instead.

AD chairman Harry Vassallo and Edward Fenech, the party's spokesman on finance, the economy and tourism, said yesterday that small companies operating in a highly competitive environment should be taxed at 30 per cent instead of 35 per cent.

At the same time, tax rates for the banks, which face "a very restricted level of competition" in a sector dominated by two major banks, should be increased from 35 to 40 per cent.

Mr Fenech said that Tonio Fenech, parliamentary secretary within the Ministry of Finance, was "highly irresponsible" when claiming on a television programme that "it is not advisable to raise the tax on banks because the banks would in turn fiddle their accounts in order to pay taxation in the UK rather than Malta".

The AD spokesman said banks should not be held in such a low esteem, and added that even if what the parliamentary secretary claimed had to happen, the government was in a position to combat such a practice.

"Is the Tax Compliance Unit only there to target small companies, while leaving large corporations off the hook?"

Dr Vassallo said half of the Lm12 million the government had set aside for tax cuts should be allocated to families with children, translating into a cash benefit of Lm100 for each child.

"In this way, a family raising two children with an income of Lm6,000 a year will be guaranteed a benefit of at least Lm200 rather than the miserly Lm30 being offered by the government," Dr Vassallo said.

The other Lm6 million, he added, should be given as a tax deduction.