02 APRIL 2003

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MLP’s income tax cuts fail to impress constituted bodies

The constituted bodies were not awe struck by the Labour Party’s proposal to offer a two month income tax holiday to all and sundry and some even queried the lack of strategy behind the initiative announced last Saturday.
"This is politics not economics," was the initial reaction of the Malta Employers’ Association director general Joseph Farrugia. For GRTU director general Vince Farrugia, the proposal warranted a ‘no comment’ because it was never discussed with the constituted bodies.
"I hope that the proposal will eventually be discussed with the constituted bodies in the Malta Council for Economic and Social Development if Labour is elected to government because it has wide-ranging consequences on different aspects of the economy," Farrugia told The Malta Financial and Business Times.
Farrugia added: "Over the last four years we have been accustomed to a system whereby constituted bodies are consulted at every stage of proposals that deal with the economy. The time when somebody simply dishes out a proposal, especially on the eve of an election, and simply expects everyone to approve is over."
Meanwhile, MEA director general Joseph Farrugia said that the initiative was a short-term measure. "It does not form part of a wider fiscal strategy," he insisted.
Joseph Farrugia expressed his doubts on the consistency of the two-month tax cut when the Labour Party continually emphasises the big financial problems facing the country.
"This is a pre-electoral tactic. Normally such tactics are part of a wider strategy, which does not seem to be the case. This is politics, not economics," Joseph Farrugia reiterated.
The MEA director general also expressed his hope that the proposal will eventually be discussed at the MCESD before being implemented. "That is what we have become accustomed to over the past few years," Joseph Farrugia said.
The Federation of Industry and the Chamber of Commerce had no comment to make on the specific proposal. A spokesman for the Chamber informed this newspaper that the it would be issuing a reaction on the manifestos of the political parties later on during the week. The Chamber is also expected to meet the political parties in due course to discuss with them the manifestos.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
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