With Government’s deficit predictions for 2008 going haywire, Finance Minister Tonio Fenech yesterday shifted the 2010 self-imposed target to have a surplus budget by one year.
In view of the impending economic recession the Minister backtracked on the previous year’s predictions but still presented a budget that targets a deficit of 1.6% or €98.8 million for 2009.
The deficit target means that Fenech’s first budget as finance minister offered little relief to cushion the impact of higher utility tariffs while raising consumption taxes, namely excise duty and the eco-contribution.
Government will be collecting €15.5 million more from excise taxes on cigarettes, spirits and petrol and €9.3 million more in eco-contributions on plastic bags, conventional light bulbs and bulk printed matter.
The Minister did reduce income tax by widening all the tax bands but the extra cash in people’s pockets will hardly make up for the astronomical increases in utility tariffs decided upon last week.
The much awaited car registration tax overhaul was also announced with effect from 1 January 2009. Those registering a new car during 2008 will be given the option to shift to the new registration system which will see the annual licence vary according to the car’s age.
Measures
COLA increase: €4.08 per week
Tourism contributions: €0.50 c per person a day from 2010
Revision of income tax bands
Car registration tax overhaul
Excise duty increased on alcoholic drinks
Cigarettes up €0.20
Excise duty on petrol up €0.055, diesel up €0.02
Eco-tax on printed matter, plastic bags and traditional light bulbs and tubes
