Labour has proposed two options to spare minimum wage earners from paying income tax, after the Finance Minister criticised Opposition leader Joseph Muscat for not saying how he would fulfil his promise.

This tax exposes an anti-social government

“There could be a specific provision in the law that will see that people on minimum wage do not pay taxes or granting a refund,” a Labour spokesman told The Times, adding that his party would rectify the situation “brought about by this Government”.

A change in the law would provide that minimum wage earners would not pay tax on their income and related benefits, such as statutory bonuses.

The measure would cost up to €350,000 in the first year, the spokesman said, but this was a “point of principle”.

“This exercise by GonziPN to tax people on the minimum wage exposes an anti-social government,” he said.

Responding to Dr Muscat’s Budget reply on Wednesday, Finance Minister Tonio Fenech said the issue was a “storm in a teacup”, which would only affect 2,000 single people, not those raising families.

He said the Government had to make choices and would rather focus its energy on giving a weekly €25 allowance to those who accepted training.

According to the Budget, single minimum wage earners will end up paying around €60 income tax annually when their statutory bonuses and this year’s cost-of-living-allowance are taken into account.

The Prime Minister had originally denied they would have to pay tax, saying: “On the contrary, the income tax rate for those who earn minimum wage, will not be affected... zero.”

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