News | Wednesday, 03 June 2009

‘Company tax should be reduced to 5%’ - AN

David Darmanin

At a press event held at the Vittoriosa market yesterday morning, AN Leader Josie Muscat said “the only way to curb cost of living is by decreasing taxation,” suggesting a company tax cut to 5 per cent across the board, down by 30 per cent from the current standard rate.
“In the run-up to 6 June elections, other parties shifted their focus on local issues without responding to what Malta can do in the EU,” Muscat said. “We must however elect people who can exploit the EU in order to tackle the cost of living issue in Malta.”
Muscat said “there will be no victory” on 6 June, because “the party in government will remain in government and the party in opposition will remain in opposition.”
While criticising other parties for bringing up local issues in their campaigns, Muscat said: “The only way this can be done is by increasing wealth, boost exportation and allow salaries to rise. No government has ever managed to decrease cost of living. Figures show that investment in Malta decreased substantially, and so have our exports. This is why our wages are never sufficient. Once salaries increase, government funds increase proportionately due to higher revenue increases from income tax. Once government revenue, there will be an opportunity for taxes to go down. One thing leads to the other.”
“Foreign investment is not rising,” Muscat complained. “All we hear about is Lufthansa Technik and pharmaceutical companies – but we no longer hear anything about SmartCity. If we must decrease cost of living, we need to create a suitable investment climate in Malta. But local investors are disheartened and there is a big flight of capital, as investors are putting their money abroad. Foreign companies pay an annual tax rate of 5 per cent. We are not saying this is wrong, because such incentives generate employment. But if foreign companies are benefiting out of this privilege, then the same must be offered to local companies. The 35 per cent tax rate for Maltese companies must go down gradually to 5 per cent so as to encourage investment.”
Muscat went on to outline the need of further investment in education, specifically in the training and recruitment of academic staff.
“Education needs a general re-haul,” he said. “We must invest in it in such a way that our students become creative and flexible – with all the qualities allowing them to change their career paths if the need arises.”
Muscat suggested that “if we must imitate”, then we should take a leaf out of the book of Canada, Malaysia, Korea and Japan.
“Communist countries and emerging economies are investing substantially in education. Europe must take their example if it is to compete with them,” he said.
AN EP Candidate John Spiteri Gingell said that AN’s economic and educational proposals outlined in the run up to the March 8 General elections last year were “revolutionary”.
“We suggested a monetary allowance for parents to choose what private school their children should attend,” Spiteri Gingell said. “Same goes with health, why should we spend all that money with Mater Dei when the service leaves much to be desired? Why don’t we have an allocation for health insurances so we can see to our health needs privately?”



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03 June 2009

Malta Today


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