The Prime Minister said today that the government would do its best to honour the electoral pledge to reduce income tax.

He was asked during a press conference on the third year of his government whether the promise to reduce the top rate of income tax to 25 percent would be honoured by the end of this legislature, given the current economic situation and the Libyan crisis.

Replying, Dr Gonzi said the government would seek to honour all its electoral promises, but would do so with "honesty and responsibility".

He said that the income tax pledge was linked to the performance of the economy. "When we are persuaded that the reduction of income tax will benefit competitiveness and growth, we will implement it," Dr Gonzi said.

Earlier in his press conference, Dr Gonzi said the Maltese economy last year was among the best performing in the EU.

GDP grew by 3.6%, unemployment was the second lowest in Europe and job creation was among the strongest.

He expressed confidence that Malta would end this year with a deficit below the 3% threshold required by the Maastricht eurozone criteria..

AIR MALTA

Asked how Air Malta's restructuring could impact the deficit reduction targets, Dr Gonzi said the government was drafting a plan, acceptable tot he EU, which would put the airline on long-term solid foundations. He admitted that the exercise would have an impact on the deficit but, nonetheless, he was optimistic that the deficit targets would still be met.