Updated: UHM calls for lower tax bands
The UHM said today it was calling on the governemnt to reduce maximum income tax to 25% from 35%, as a means to discourage tax evasion and to leave more money in the people's pockets.
UHM President Gejtu Tanti told a press conference that according to the UHM's calculations, the cost of living allowance (COLA) for the next Budget should be €5.82 and the union felt that should be paid in full as part of salaries, and not allowances.
Such an increase, he said, would not be the highest ever. Last year €6.41 were given, of which €2.33 had been given in advance the year before.
Referring to a warning by employers that a steep cost of living increase would mean job losses, UHM General Secretary Gejtu Vella said that if there were companies facing problems, the government should tackle them on an individual basis, as it was already doing. Some companies were doing well and others had made no investment in the past few years and now they were even saying they did not want to pay the COLA, he said.
He said the UHM was also calling for a fund for the training of workers who lack basic skills; family-friendly measures, also in the private sector; a stronger Tax Compliance Unit, the engagement of more VAT inspectors and harsher penalties for those who avoid tax.
The union is also calling for a revision of unemployment benefit and the minimum wage. Mr Vella said the two were so close to each other that there was no incentive for the unemployed to go to work.
He said that the main focus of the budget should be the creation and protection of jobs, but said the UHM was also calling for a Price Watch Agency to protect consumer rights.
Mr Vella said the UHM felt that civil service resources should be better utilised, and work done by the civil service should not be farmed out to the private sector.
He also called for a re-evaluation of the mechanism used for the calculation of expenses made by pensioners to ensure that such elderly people are adequately compensated.
He also called for a review of the Pharmacy of Your Choice Scheme to ensure that all those entitled to free medicines actually got them and there was no waste.
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maria curmi
Oct 27th 2009, 07:21
HI Gejtu what about the stolen feast that come on sat and Sundays no comment so we could have more time with our families and what about 6 euros rise do you think its enough what a joke the importance to save jobs say it to the dockyard workers seamalta and Go keep the water calm Gejtu that your job for now
Stefan Engelbert
Oct 26th 2009, 22:35
@E Gatt: The imputation system is pretty clear but it also forces companies indirectly to pay dividends. But what if a company wants to build up capital?
@Joe Vella: The personal tax rate becomes less important if the gross wages are OK. If it becomes more feasible for companies to create more jobs wages will go up automatically. Like David Terry already mentioned.
@jbusuttil: Slowly the EU will anyway press for higher VAT rates. Independently which party is in power.
Emanuel Cilia Debono
Oct 26th 2009, 18:09
UHM correctly insists that COLA be paid in full and as part of the salary or wage of the employee. Payment of COLA in the form of an allowance only complicates matters unnecessarily. It is unrealistic to expect cost of living to fall. UHM is also correct in asking for family friendly measures to help workers reconcile work and family responsibilities. Measures to assist industries affected by recession should be targeted to the specific needs of such industries and should be aimed at encouraging useful investment. The setting up of a Price Watch Agency is a priority.
m farrugia
Oct 26th 2009, 17:19
@ Shaun Grech JM proposed: reduction of tax on property Why should taxpayers make good for the unsightly block of apartments which our developers filled our islands with in the hope of making quick money? The building boom bubble was sure to burst sooner or later and now developers expect the govt (ie taxpayers) to make good for their short sightedness Why not spare these funds wisely for another timely decrease in income tax rate?
m farrugia
Oct 26th 2009, 17:16
@ Shaun Grech JM proposed: removal of 50c tax on hotel rooms reduction of VAT rate on restaurants reduction of tax on property Just imagine a tourist not coming to Malta because of a 50c nightly tax - this minimal tax exists in a number of countries such as Croatia and I wonder how many of us take notice of this tax while they are on holiday. The key to tourism is accessibility, so why not use this tax to open more LCC routes to Malta, especially in winter? Proposal to reduce vat on restaurants- as happened when levies on wines were removed, there is no guarantee that prices will go down. If as Joseph says, families are fighting to survive, probably they are not spending much of their income on restaurants. As to tourism, again, I wonder how many of us bother to check vat rate on restaurants when abroad. And let's be honest, in how many countries in Europe, including Eastern Europe, are restaurants cheaper than in Malta? So with the removal of VAT on restaurants, probably neither Maltese nor tourism would benefit. On the contrary, Maltese will have to fork out the reduction in taxes.
c. camilleri
Oct 26th 2009, 17:12
How easy it is to suggest without having the responsibility to administer. Many many proposals coming from all quarters but no one has pointed out from where to replace the money which the Govt will forfeit.
michael fenech
Oct 26th 2009, 16:53
@ JOE VELLA, Mr.Vella is it possible that for once you make a comment without involving politics? Whenever I read your comments there is always politics involved can’t ever say anything without mentioning politics. To tell you the truth comments BORE me.
Michael Seychell
Oct 26th 2009, 16:03
! fully agree that the COLA should be paid in full to all workers despite what has been said by the Chamber of Commerce and Industry. It is a fact that some entrepreneurs have during the years have invested millions of Euros to be more competitive, whilst others are doing this during these difficult times, amongst which comes to mind Mizzi Group/Coca; Cementstone and Playmobil.
It is also true that there were Industries facing difficult times and these received financial assistance from the government, thus saving over 2 thousand jobs. However there are other industries/businesses who did not need to invest in their business and despite recession made good profit - GOOD LUCK TO THEM
In the circumstances all employers should pay the COLA and those affected very negatively, should seek government assistance and if they prove that this is really necessary, government should help them,to avoid having to take drastic actions.
The parking operators in Valletta and Mater dei Hospital would definetely need no assistance since their capital expenditure to start business was quite low considering their daily income and the small number of employees required . BAD LUCK TO THOSE USING THEIR SERVICES, ESPECIALLY LOW INCOME WORKERS/PENSIONERS.
Michael Seychell
D.Galea
Oct 26th 2009, 15:58
TOTALLY AGREE WITH MR. GEJTU TANTI'S WAY OF THINKING. KEEP UP THE GOOD WORK
Mario Sacco
Oct 26th 2009, 15:43
I would like to answer Mr Farrugia' somment regarding family friendly measures. Rest assured that all family friendly measures can be utilised and it is up to the Management prerogative to substitute these employees. Therfore Mr Farrugia is completely wrong when he alleged that Departments' are empty due to these measures. Moreover in several measures where UHM was directly involved we transformed these measures into a win win situation. See also today's article on UHM website (www.uhm.org.mt) regarding flexi-time.
E Gatt
Oct 26th 2009, 15:37
@Stefan Engelbert
Malta operates the full imputation system of taxation which means that the tax paid by the company is available as a credit to the shareholders when distributions are made to them. Company tax of 35% is available as a credit to the shareholders upon receiving dividends from the company.
Wikipedia is a good starting point to look up information on the internet but remember that anyone can upload information on Wikipedia and therefore it is not always reliable.
Most other European countries do not operate the full imputation system. This is not reflected in the Wikipedia table you referred to and therefore comparisons cannot be made.
The socialist grassroots do not believe in lower taxation, the PL leadership can pretend they do (a purely dishonest vote catching exercise in my opinion) but the general message PL grassroots are giving is less market freedom and more state control.
Income tax rates have been reduced and the best guarantee for further reductions is ensuring that PN remains in power.
Joe Vella
Oct 26th 2009, 15:35
@ Stefan Engelbert
Funny you make reference only to the Corporate Tax Rate and not to the Personal Income Tax rate as well. Or you are shamed to say that in Socialist run Countries the Personal Income Tax rate is in the excess of 50%?
David Terry
Oct 26th 2009, 14:48
As long I see the bars and restaurants packed with people I do not see why the private tax bands should be revised.
But just imagine the government would make the companies more competitive. They would create more jobs and automatically the wages would go up! Ireland is the best example how that works. Amazon, Microsoft, etc are not there for nothing. But with 35 % for sure they will not move to dump city.
Just my own 2 cents - without Texas Cowboys!
J Farrugia
Oct 26th 2009, 14:43
Family friendly measures my foot. Go in the departments and see for yourselves what this union is doing to wreck all government departments by its family friendly measures. No wonder people are not getting the services they deserve.. Empty offices do not serve the citizens. Working from home, parental leaves and other 'benefits for women employed in the civil service' does not serve John Citizen as should be.
Alex Right
Oct 26th 2009, 14:29
This is a great idea, lets lower the income to the goverment, this in combination with better services, more free healthcare, why not free dental work, Better roads, lower companytax, extra money to people that dont have money will help the public finances.
Come on, lets face reality here, EU has warned Malta about its defecit, Malta is bleeding money. There is different ways around this and yes you can lower the income tax, but can you lower the guverment spendings with the same amount at once?
Can you improve roads, social services etc when the amount of money coming in goes down?
We all wants things to get better, but at the moment this involves keeping a very good eye on the economy and NOT lower the income and increase the spending, if a company does that, it goes bankrupt, Malta as an island is already on a good way to manage that as a country, lets not speed it up further.
jbusuttil
Oct 26th 2009, 14:18
@Stefan Engelbert
Very interesting attachment hope that you did not open the door to higher vat rates. Better corporate tax at 35% as the majority of the working class do not hit that rate rather than having higher vat rate for all.
mark spiteri
Oct 26th 2009, 14:17
that link shows we are one of the least taxed (on labour) in europe
Shaun Grech
Oct 26th 2009, 13:39
I'm glad that UHM came out with these proposals.....it seems as if Mr. Vella has the same mind track of Dr. Joseph Muscat. This is because most of these bagitary proposals were first put forward by Dr. Muscat yesterday at Zabbar manifestation.
The reduction of income tax would be a good solution in order to tackle and trigger the eceonomy positively. Maltese people aren't coping with the increasing cost of living and electricity bills. Morever there are so many hidden taxes and tariffs that its impossible to survive!!! Dr. Gonzi promised this in last election...he should be responsible enough and take this decision. Otherwise he will be remember as the biggest lier ever in Maltese political history.
However i know that Dr. Gonzi will not keep his word because he will just implement this measure in the last 2 bagits in an attempt to buy people's votes to get re-elected.
Stefan Engelbert
Oct 26th 2009, 13:24
An overview of the TAX rates in Europe can bee seen on: http://en.wikipedia.org/wiki/Tax_rates_of_Europe
It is interesting to see that Malta has nearly the hightes coporate tax in europe.