Two main unions push for tax cuts

Malta's two leading trade unions are insisting that the government keeps its electoral promise to cut income tax and include the reform in the next budget document, union representatives said.

The secretary general of the General Workers' Union (GWU), Tony Zarb, and his counterpart at the Union Ħaddiema Magħqudin (UĦM), Gejtu Vella - both members of the Malta Council for Economic and Social Development (MCESD) - spoke to the media shortly after emerging from a meeting between the government and the council to discuss the pre-budget document.

Before the meeting started, at 10 a.m., Finance Minister Tonio Fenech explained that the purpose of the meeting was to present the pre-budget document to the MCESD and explain and clarify certain aspects.

The context of the budget was of a country facing various opportunities but also challenges brought about by global realities and uncertainty, he noted. Still, Malta's current economic situation was "still moving at a good pace". Listing the budget objectives, Mr Fenech said it was to respond to realities and consolidate economic growth while tacking social strains. The budget should also address development and investment and ensure sustainability.

When Mr Fenech concluded his introduction, members of the media were asked to leave the room and a three-hour discussion ensued.

On emerging from the meeting, Mr Zarb said he had insisted that the next budget ought to focus on reducing financial burdens brought about by the price of oil, food and the increased surcharge.

The GWU believed the government ought to keep its pre-electoral promise about tax reform.

Mr Vella agreed, adding that his union had moved proposals during the meeting, including a reform in taxation.

The director general of the Chamber of Small and Medium Enterprises - GRTU, Vince Farrugia said the pre-budget document did not contain sufficient incentives for small enterprises or measures that would absorb the negative impact of the surcharge and increased costs of fuel. Tax reforms were a way of reducing financial burdens.

Parliamentary Secretary Chris Said said that yesterday's meeting was the first discussion meeting and others would follow in the coming weeks. Yesterday, he said, MCESD members were asked to produce their suggestions to be discussed at further meetings.

The pre-budget document was a set of proposals for discussion and no guarantees could be given about tax reform or any other subjects, he added.

Tax reform was mentioned in the document but the manner of implementation and measures would be determined after consultation.

The pre-budget document clearly stated that the government is aiming to remove subsidies and reduce taxation. This was the direction taken in the last budget, Dr Said said.