Revenue to be brought in by the Government from new indirect taxes next year has been revised down by €7.6 million, according to a draft Budget plan pub-lished yesterday.

The Finance Ministry intends to rake in €23.9 million from indirect taxation measures to be announced in Budget 2014, which Minister Edward Scicluna yesterday said would be imposed gradually.

This is lower than the figure given in a document submitted earlier this month to the European Commission outlining government action to cut the deficit. This put the take from new indirect tax at €31.5 million.

But the Government will more than make up for this gap in revenue by cutting planned funding for “expansionary measures” partly intended to spur growth and employment. This expenditure will be slashed from the €40.3 million in the document sent to Brussels, to €27.7 million under the latest plan.

Fees of Office – government services for a fee, to be announced in the 2014 Budget – stay the same at €15 million.

The draft plan is underpinned by the principle that “economic prosperity and wealth should be felt and enjoyed by all”.

So while the widening of the income tax bands for middle income earners will leave a further €13 million hole in Government income, a series of other measures will benefit the bottom income earners. One of them is again excluding those earning less than the minimum wage from income tax.

In another major fiscal consolidation measure, the Government will make €11 million more and spend nearly €20 million less as a result of the 2006 pension reform initiatives.

In addition, capital injection in Air Malta will go down from €40 million this year to €15 million in 2014.

The bottom line under the new plan is that the Government intends to end 2014 with a positive balance of €50.9 million from its revisions to various expenditure and revenue measures.

This is necessary to meet its target of cutting the deficit to 2.1 per cent of GDP next year, with 2013 projected at 2.7 per cent, below the EU imposed limit of three per cent.

These measures will be backed up by stronger drives against tax avoidance and evasion, the draft plan says, while public expenditure will continue to be controlled through an ongoing spending review.

Economic growth is projected at 1.2 per cent this year and 1.7 per cent in 2014, supported by stronger domestic demand. Employment is expected to keep growing at a rate of 1.8 per cent in both years, supporting a higher female employment rate.

The draft plan also foresees a stabilisation of Government debt at 73.2 per cent of GDP by next year.

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