A Labour government will introduce a final withholding tax of 15 per cent for the property rental market to replace the current 35 per cent income tax.

Labour leader Joseph Muscat said this would not only encourage people to rent out their properties but would also discourage tax evasion.

He was addressing a gathering for business leaders, mostly from the property sector, in an event organised by Labour’s Business Forum.

In a second proposal, Dr Muscat said his government would also revise, in the shortest time possible, the permanent residence scheme, which, he said, was not reaching its aims. This would give the economy the required injection of capital.

He spoke about the other proposals, saying Labour would cut down bureaucracy, update regulations and remove old ones, and give legislation an expiry date, better known as sunset clauses.

Dr Muscat also spoke briefly on the energy tariffs and the Standard & Poor’s report which he said set alarm bells ringing.

Replying to questions, Dr Muscat said that the Mepa reform had failed completely and the authority’s revenue dropped rather than increased.

He said Labour would be announcing proposals for a wide ranging reform which would address issues related to Mepa in the coming weeks.