6 - 12 December 2000

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The right direction after all

It must have been a hectic Monday for Mr Farrugia, the GRTU director, as he changed tack and upheld the weighting of the Retail Price Index as a serious matter after all.

The newspaper title read, "Vince Farrugia says there was no fudging of the RPI," which is just as well after Mr Farrugia’s previous statements the week before.

Mr Farrugia told that newspaper: "One other factor was that although water and electricity rates have been steadily increasing, government is also giving out rebates and thus subsidising the rates. It will only be in 2002 that the people will shoulder all the increases. It is also clear that the impact of the rate increases on the cost of living on those households which mostly impact on the RPI was taken notice of when the rates were set".

It appears that there will be no storm for the time being. Though Mr Zarb has argued that the utility bills have been compared to a Kinnie drink and travelling tariff.

Apart from the Farsons gratis advert, the comparison appeared fudgy to use a Vince Farrugia word.

The other storm that could have been but is only supported by singular self-centred editorials deals with fringe benefits.

Here again, we are not talking of fringe benefits linked to bona fide allowances but deliberate attempts to hide income and avoid tax.

The fringe category we are talking of is something like a declared salary of Lm7,000 and an allowance of Lm7,000 the latter is untaxed of course.

There was a childish commentary in a newspaper that left no stone unturned in hitting out at these measures, conveniently forgetting about the abuses taking place in this sector. The reasoning here was to attack the Finance minister and attempt to portray one of his colleagues as a more amiable fellow.

There are two categories of fringe benefit individuals, those in the professional classes and those who run small and big companies. The latter have little or no arguments.

Flats, cars and yachts are all kicked under the fringe benefit regime and better still are purchased as company items and saved from duty.

But in the case of professionals or middle management, companies have continued to raise the wage packets of individuals by keeping the visible salary low and expanding on the allowance.

This has gone too far and gone on for far too long.

The third matter is the issue of refunds from educational services and here again, we notice a more sinister matter with downright abuse in some private schools where individuals in high positions abused the facility of purchasing stuff under the false premise that it was for schools.

We had better not go into the details of this, but we are tempted to.

What this budget has done is fine-tuned our tax regime operations and oiled the cogs for some serious economic direction.




The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt