The Nationalist Opposition is accusing the Government of performing a major political U-turn when it told Brussels it plans to bring in €50 million from new indirect taxation measures from next year.
Sarcastically referring to the Prime Minister’s announcement last Sunday that the upcoming Budget will “surprise” the Opposition, Dr Busuttil said it will indeed surprise everyone with €50 million of additional taxes.
“Instead of implementing what he promised before the election, the Prime Minister is doing exactly the opposite,” Dr Busuttil charged.
“He promised not to raise taxes and now we discover he will introduce €50 million of extra taxes in just one year,” he said.
In its report to Brussels, as part of its obligations to reduce the deficit, the Government plans to increase the tax burden in 2014 to 36.8 per cent of GDP from 35.8 per cent. The plan includes an approved increase of €31.5 million in indirect taxes and another €15 million in new revenue measures yet to be announced.
Accusing the Government of making hollow promises before the election, Dr Busuttil urged the Prime Minister to come forward with the full list of taxes he was planning to introduce to eliminate uncertainty.
He said that apart from the increase in taxation, Government documents also revealed that contrary to what was stated by Dr Muscat last June, the Government had slashed its 2013 Budget by €21 million.
“When we told him Brussels had ordered a revision he accused us of lying. Now he is admitting that cuts of €21 million were indeed made. The Prime Minister should tell the truth,” he said.
Dr Busuttil said that after criticising the pension reform introduced in 2006, the Government was now boasting in Brussels that this was giving positive results.
He called on the Government to say whether it consulted the Malta Council for Economic and Social Development on the new Budget measures because according to the documents these decisions had already been taken.
He promised not to raise taxes
He said as time passed, the electorate was cottoning on to Labour’s false promises and realising it was more interested in dishing out money to party supporters than addressing the country’s needs.
Deputy leader Mario de Marco accused the Government of increasing taxes to sustain “Malta’s largest ever Cabinet”. He said the new government team was increasing expenditure by €21 million each year.
Finance shadow minister Tonio Fenech said the Government was showing a series lack of economic vision. In a counter statement, Labour accused the PN of negative politics and said the Prime Minister was working towards lowering the deficit.