Labour proposes lower tax for part-timers, business start-ups
A Labour government will raise the ceiling of part-time work taxed at 15%, effectively reducing tax for part-timers, Labour leader Joseph Muscat said this morning.
The Labour leader said the limit, which has been frozen for the past 14 years, will be raised to income up to €10,000 from €7,000.
Another measure will be the introduction of a tax credit of €2,000 for women over 35 entering the labour market for first time
Dr Muscat said the Labour roadmap for economic growth aimed at encouraging work.
He said Labour was making several proposals for growth.
The preferred model for government's projects was public-private partnerships. He said Labour would introduce a Family Business Act to facilitate the transfer of a business from one generation to another, simplifying tax regime in this regard.
A new government would work with the private sector to create venture capital funds for new businesses.
Tax credit would be given for those who open a new company.
There would be start-up tax credit of €8,000 or 10 per cent of investment and this would be availed of in the first four years. This proposal, Dr Muscat said, would not impact government revenue because it dealt with future streams of revenue.
Full-timers, pensioners and students who had a small business on the side would pay 15 per cent tax on the first €12,000 income derived from the part-time business. This would help cut down on the black economy. This measure, he said, was expected to target 3,000 people. It would cost €1.5 million but it would be offset by curbing evasion.
Part-time workers would have the portion taxable at a flat 15 per cent increase to €10,000 from €7,000. The ceiling has been frozen for 14 years. Dr Muscat said this measure would curb evasion. The measure would apply to full-timers, students and pensioners. Some 20,000 people would benefit from this measure which would cost €5 million.
Women over 35 entering the labour market for first time would be given a tax credit of €2,000. This tax credit was not conditioned by their children's age, Dr Muscat said, There are some 5,000 women, who according to NSO, may benefit.
Labour would also provide a tax credit of 150 per cent to companies for the value of training given to workers or new employees. The expense will be capped at €3 million and EU funds can be tapped.