MLPs income tax cuts fail
to impress constituted bodies
The constituted bodies were not awe struck by the Labour
Partys 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.