The Finance Ministry has hit back at criticism by hoteliers that utility rates and VAT costs are “crucifying” the industry.

Malta Hotels and Restaurants Association president Tony Zahra called for a reduction in both when he spoke at the presentation of the MHRA Deloitte tourism survey on Thursday.

Utility rates should be lowered by 4c a kilowatt when the Delimara power station comes on stream and VAT for hotels cut to five per cent, Mr Zahra had said.

But a spokesman for the Finance Ministry said yesterday it was “somewhat peculiar” that these comments were made as the MHRA reported another record month in tourism arrivals, an increase in bed nights and an improvement in gross operating profit per room in three-, four- and five-star hotels.

“Such results haven’t been achieved by coincidence,” the spokesman said.

“The increase in tourism is a result of increased investment in marketing.

“The Malta Tourism Authority’s budget has been substantially increased year on year during this legislature”.

The Government invested, through national and EU funding, in upgrading tourism, including renovating squares, fortifications and palaces, building new public gardens and upgrading coastal areas, the spokesman said.

“The massive investment in our tourism product has by far eclipsed the minimal VAT increase that took place during this legislature in the accommodation sector.”

The Government raised VAT on accommodation from five per cent to seven per cent in the 2011 Budget.

Reacting to Mr Zahra’s warning that if the issue of high utility rates was not solved at a national level, Enemalta could bring Malta down to the level of Greece, the ministry spokesman said lowering the tariffs would only increase either Enemalta’s or the country’s debt.

“It is precisely such action that could turn Malta’s current stable reality into another Greece,” he said, adding that 70 per cent of Enemalta’s costs were currently fuel related.