The Labour Party’s business forum has expressed surprise at the government’s decision to increase value added tax on tourist accommodation.

In a statement, it noted that particular sectors of the Maltese economy, such as i-gaming and financial services, were strengthening considerably but others were finding it hard to reach an acceptable level of expansion and profitability.

The VAT measure on tourism, the forum said, would badly affect the sector, especially in Gozo. The government, it said, should not treat tourism as a milking cow to sustain government income, especially when the industry was still recovering from a recession and facing international competition.

This was more so when it seemed that Air Malta, on which this important sector depended, would be facing a very difficult period.

The forum said it seemed the government was cut off from the real needs of the people and the economic sector, especially small enterprises.

It could not understand the way the government was treating these sectors. Tourism needed a long term strategic plan and while low cost airlines had given the tourism industry a new lease of life, they should not be considered a unique solution for the problems the sector was facing.

The forum said it could also not understand what led the government to impose an excise tax on cement at a time when the construction industry was going through a critical period.

One would have expected the government to introduce schemes which would make it easier for foreigners to buy property in Malta to get to the country the capital that was so necessary for the industry.

The forum said it was not acceptable that the government increased its share in the economy to the detriment of the private sector.

Although the government said that it wanted to facilitate economic activity, it was increasing its dominance through its income and expenditure. Moreover, Malta’s competitiveness was being destroyed with unnecessary bureaucracy, which was leading to the government taking too long to implement critical strengthening measures, such as the micro-credit scheme for enterprises.