Herman Grech
10 per cent income tax cut ruled out
Around 4,500 households will be benefitting from a solar heater subsidy.
The government will not be honouring its electoral pledge to cut the maximum income tax rate by 10 per cent in tomorrow's Budget, though a "slight" change in tax bands may be announced. Finance Minister Tonio Fenech will present a green budget tomorrow, with several fiscal incentives to encourage people to invest in alternative energy. But there will be few tax cuts, The Sunday Times has learnt.
Despite concerns over the state of public finances, some social partners believed that the government could forge ahead with its popular electoral promise to cut income taxes - to mitigate the effect of the steep rise in water and electricity rates.
The Nationalist Party's electoral programme had pledged to reduce the maximum income tax rate from 35 per cent to 25 per cent and Prime Minister Lawrence Gonzi had subsequently indicated that the measure would be introduced this year.
But tomorrow's Budget will show that the deficit has overshot projections - it rose by €87.6 million between January and September, compared with the same period last year.
With the uncertainty arising from the global economic situation, together with its impact on the local economy and government revenues, the government will adopt a markedly different approach to the one taken in last year's tax-cutting Budget.
It is even expected to 'slightly' increase excise tax on petrol and diesel.
However, the measure might not be a drastic blow to consumers' pockets, since falling oil prices mean that Enemalta should by February be in a position to reduce prices on petrol station forecourts.
Enemalta had purchased its entire diesel and petrol requirements last June for the rest of the year, when oil prices were double what they are today.
One electoral pledge which is expected to be fulfilled is the government grant of five free energy-saving light bulbs to each household in a bid to cut down on electricity bills.
Around 4,500 households will also be benefitting from a €2 million subsidy scheme, which will see the government footing two-thirds of the cost of solar water heaters.
There will also be a €10 million package of incentives for renewable energy in industry, according to sources.
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J.A. Agius
Nov 2nd 2008, 17:19
You say: "some social partners believed that the government could forge ahead with its popular electoral promise to cut income taxes - to mitigate the effect of the steep rise in water and electricity rates."
Could it be that they were wrong and that it was the other way round? Meaning the rates have been raised sky high to allow government to boast it has kept part of its promise despite the hard times?
C. Micallef
Nov 2nd 2008, 17:12
FOUR CRUCIAL BUDGET MEASURES:
1. Watch over those illegal immigrants. Even Church authorities lately admitted that we can’t afford to keep them all.
2. Review all cases of boarded-outs. Several cases are not genuine. Heavy penalties should be imposed on the doctors who approve boarded-outs without real justification and on the persons themselves if they are caught working even at home! Either they are fit for work or not. Another problem also exists with people who should not be registering for work. An anti-abuse task force should be set up to take prompt action even upon receiving an anonymous phone call.
3. Reduce amount of EXTRA feasts. I am not referring to the traditional parish feasts that have been with us for centuries. However, we have during the past decade, increased the number of festas, the main one being Notte Bianca. Such celebrations increase tremendously the consumption of electricity and also contribute to more climate change.
4. Freeze unjustified salary demands. As Minister Dalli recently said, any Euro increase in salary has to be linked with productivity. We can’t keep having unions demanding more and more for their members simply on the grounds that their collective agreements have expired.
Darby Allen
Nov 2nd 2008, 14:55
A government failing to honour their electoral pledge? I've never heard of such a thing!
Gonzi said "Judge me not by my words, but by my actions". Blair said the same thing, and look what has happened to the UK!
Jeremy J Camilleri
Nov 2nd 2008, 14:43
@S Fenech
The act of judging is not restricted to every 5 years.
We judge continually.
It is really sad if someone like you has been led to believe that judgement can only be carried out once every 5 years.
n cutajar
Nov 2nd 2008, 12:01
How much is the hair brained idea of giving children allowance to every child costing us? this measure was introduced to benefit the well off to the detriment of those famlies who need the allowance most. A millionaire is now entitled to children allowance while I had mine reduced because I, who who happens to be the only bread winner in my family, got a small increase in salary .So this increase has been neutralized by the reduction in children allowance.
L Zahra
Nov 2nd 2008, 11:29
I think this would be a good start.
PN promised 2 things:
1. Increase 25% threshold to 60000 EUR (The article wrongly gives the impression that Income tax will be reduced by 10% on all levels, i.e even those earning 200,000 would be paying 25% - This is absolutely incorrect
2. Reduce tax on all levels by increasing the thresholds - i.e threshold when people start paying 15% tax and 25%.
If the second happens, that means that one out of two promised tax cuts would have already been achieved in one out of 5 years of the legislature. Which is even more positive considering the economic crisis looming all over the world.
S Fenech
Nov 2nd 2008, 11:27
@JJ Camilleri
Judgement is made only every five years.
Jeremy J Camilleri
Nov 2nd 2008, 11:21
'Judge me not by my words, but by my actions'-- Dr.Lawrence Gonzi.
I guess its time to start doing just that.
A.Vella
Nov 2nd 2008, 11:13
"There will also be a €10 million package of incentives for renewable energy in industry, according to sources."
Will this follow in the steps for airconditioning rebates where one has to wait for nearly six months for a refund of € 58?