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By James Debono
Unbelievably only 4,142 persons in Malta and Gozo declare incomes of more than Lm16,000. The figures were revealed by Prime Minister Lawrence Gonzi when answering a parliamentary question on 28 February.
75 per cent of all those declaring more than Lm16,000 are employees. Only 606 self-employed persons declare earnings of more than Lm16,000. 435 other persons declaring this income were engaged in both salaried work and self-employment. Considering that according to the latest Labour Force survey there are more than 20,000 self-employed persons, only five per cents of all self-employed persons declare incomes of more than Lm 16,000.
Women are also under-represented among those declaring more than Lm16,000. Only eight per cent of those declaring earning of more than Lm16,000 are women. This reflects the gender imbalance in top management positions.
A total of 48,176 declared incomes of more than Lm6840. More than 40 per cent of these belonged to the Lm7001 - Lm8500 bracket. A total of 15,443 people declared incomes of more than Lm10,000.
Only 55 self employed or partly self-employed Gozitans declared an income of more than LM 16,000.
MaltaToday contacted former Finance Ministers Leo Brincat and George Bonello Dupuis. Leo Brincat expressed his disappointment that the situation has not drastically as regards tax evasion has not drastically improved inspite of the introduction of fringe benefit tax . “These statistics should also embarrass the tax compliance unit which has been around for some time now. How can one believe that only 606 self employed persons earn - or rather declare earning - more than Lm16,000? The former finance minister insisted that the tax authorities should get the necessary expertise to probe people's life styles. “It does not make sense to still have people registering for work going to the ETC driving their own Mercedes! Before the introduction of fringe benefits tax I had heard of various key top managers who declared only one third of their actual income the rest being taken home as under the counter cash benefits.”
Former Minister Dupuis also described the number of people earning more than Lm16,000 as “low” but instead of proposing more controls the former minister proposes a reduction in taxation. “When I took over as Minister I reduced the highest rate of income tax from 65 per cent to 35 per cent. This led to a marked increase in the number of people declaring higher incomes. I think that the highest tax rate should now be reduced to 30 per cent. On the other hand it is also time that we emulate most European countries by introducing a 10 per cent cooperation tax on companies. In this way companies and not just individuals would be taxed.”
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