The fact that Malta has the lowest income tax confirms the government's commitment to leave more money in people's pockets, according to Finance Minister Tonio Fenech.

He said yesterday that, although tax revenue was essential for the funding of government services, income tax was cut in the last three budgets.

He was reacting to figures just issued by Eurostat, which showed the Maltese paid the least income tax in the EU despite the fact that income tax rose fastest in Cyprus and Malta between 2000 and 2007.

The figures also showed that the increase in Malta's tax revenue was the second highest in the EU over the past seven years.

The Finance Ministry pointed out that the average income tax of 20.1 per cent in Malta was the lowest in the 27 EU member states. The average in the EU stood at 34 per cent and it exceeded 40 per cent in Belgium, the Czech Republic, Hungary, Austria, Finland and Sweden.

The ministry said an overview of all taxes paid by the Maltese also confirmed local levels as being well below the EU average.

The Maltese average was 34.7 per cent, five per cent below the EU average and six per cent less than the eurozone average.

The Labour Party said it seemed the government did not learn anything from the people's message given through the June 6 elections and tried to give the impression that the Maltese and the Gozitans did not pay a lot of taxes.

It noted that the Eurostat statistics quoted by the government showed that Malta had the second highest increase in taxes among EU states between 2000 and 2007.

It was evident the government had lost control and was falling apart, Labour said.