15 JANUARY 2003

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Toon this week: Turning off the waterworks

The U-turn that was

When Dr Alfred Sant said he would retain VAT if the Labour party were elected this year there were few surprises. Indeed, we had expected it.

The Opposition leader said that it was time to embrace VAT and six years after spearheading a damning campaign against the introduction of VAT, Dr Sant has decided to swallow his words and ask everyone to turn a deaf ear to his previous derogatory comments on the tax system.

His decision is a welcome and inevitable one.

But what needs to be assessed and critically analysed is the waste of time this country was coerced to endure in order to satisfy the whims of a political campaign aimed at bringing down a government and replacing it with another.

The issue of VAT removal not only contributed to seeing in a change of government, but it also led to a crisis in tax collection.

There is little or no argument to counter the advantages of VAT.

VAT taxes consumption and this why VAT is socially acceptable.

VAT is not a Maltese invention.

But one cannot forget the man who introduced VAT on two consecutive occasions (probably a potential entry for the Guinness Book of World Records), John Dalli. He cannot be forgotten simply for the mudslinging that came his way after the arrival of VAT upon Malta’s shores.

If there was anyone who should feel vindicated it is undoubtedly Mr Dalli. He had masterminded VAT in 1996 and was later blamed for the PN’s downfall.

When he returned in 1998, he left no stone unturned in removing the half-baked former tax regime known as CET and replacing it with VAT.

VAT is not only the more acceptable tax regime, but it is one that fits nicely into the European Union’s framework of free trade.

As such, importation and exportation will be much simpler.

When John Dalli addressed the press on Dr Alfred Sant’s decision to integrate VAT into its electoral manifesto, he did not denigrate or hit out at Dr Sant’s U-turn decision.

Instead he used his time to remind the media of the manifestations of spin in opposing VAT over the last six years.

His poignant comment was that this decision would write off some of the uncertainty that had overshadowed the business community.

And in business there is nothing more reassuring than certainty and direction.

The rise and rise of speculation

The Tigne´ project is the talk of town. We have no intention of ruining the project’s prospects but it does irk us that there is little doubt that the sale of the apartments at Tigne´ is turning out to be a speculator’s den.

Indeed, the purchase, as we very well know, is being seen as a long-term investment by a number of individuals. That, in simpler terms, is called speculation.

What is even more worrying is the ensuing hike in prices, which inevitably leads to a snowball effect on the estate world.

Indeed, if there is need of any proof that property prices have risen to untenable heights due to actions taken in the internal market, then this is it.

And unfortunately there is little we can do, other than look on and wait.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Business Times, Newsworks Ltd, 2 Cali House, Vjal ir-Rihan, San Gwann SGN 02, Malta
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