Tonio Fenech

Opposition spokesman on finance Tonio Fenech accused the Government of going back on its electoral promise to ease the tax burden by proposing to increase indirect taxation revenues by €40 million next year when this year the rise was of only €8 million.

Mr Fenech quoted from the report on the Government’s budget proposals sent to the European Commission which said the tax burden would increase by one per cent of GDP to 36.8 per cent. The Government was to collect €9 million more from excise duties on fuel, cement and cigarettes.

Fees for services were to increase by another €15 million when it was estimated that the Government revenue from this sector was around €20 million.

He said business was stagnant, with the Government collecting €14 million less in VAT than estimated. Projected revenue from licenses and other duties was to be €13 million less than projected mainly because the property market had still not recovered.

The report showed that indirect taxation would continue to rise in future years to offset the gradual loss from the income tax regime. He hoped that the Government had embarked on a social and economic assessment of these tax measures.

Mr Fenech said that on coming to power the new administration had found that finances were sound – in its reports to the European Commission the Government had said that everything was going smoothly.

It also boasted that Enemalta was this year saving €36 million on fuel because of the BWSC power plant in Delimara.

The report showed that the Government had failed to take measures to cut unnecessary waste and was re-introducing a policy whereby it would employ two new employees for every three who retired from public service.

Earlier, Mr Fenech spoke about the amendments to the VAT law and said the Opposition was not against a revision of fines and interest rates.

He emphasised that the deterrent factor had to remain strong to ensure that contributions through VAT would remain high.