Labour Party leader’s VAT proposal

The Labour Party’s director of communications, Kurt Farrugia, said Joseph Muscat never favoured the proposal that VAT should be reduced from 18 to 17 per cent across the board (November 9) as we claimed on Bondiplus. Therefore, Mr Farrugia gleefully concluded, “this gaffe alone strikes €52 million off” our financial workings on the Labour leader’s views.

Really? Here is Dr Muscat in a Labour Party press release: “Dr Muscat said that, contrary to what our government was doing, other governments, like the UK’s, decided to reduce VAT. Dr Muscat criticised Lawrence Gonzi that he was not following in the footsteps of other countries...” (November 23, 2008). The UK government had reduced VAT from 18 to 17 per cent across the board.

Secondly, Mr Farrugia said we were wrong when we claimed member states require the EU’s consent to reduce the general VAT rate. We never made such a claim. It was Dr Muscat who made it on his website last year: “We should reduce the 18 per cent VAT rate now that the EU has given us the opportunity.”

In sum, there is no doubt that the Bondiplus figures on this count are accurate.

Nevertheless, once Dr Muscat has thrown doubt on all our workings, we decided to air another programme on Monday to provide the PL with an opportunity to suggest alterations. We would be the first to admit a mistake if we made one. These figures are about people’s lives, not egos. We shall wait and see.