The Union Ħaddiema Magħqudin yesterday called on the government to trim the top income tax band from 35 to 25 per cent, saying it would curb tax evasion and eventually result in more revenue for the country.

In its proposals for the 2010 Budget, Malta's second largest union also urged the government to pay the full cost-of-living allowance to workers and pensioners.

But lowering the highest tax band - a pre-electoral promise - has already been ruled out by Finance Minister Tonio Fenech who in September said he did not take "gamblish" decisions.

Union president Gejtu Tanti explained that according to its calculations, based on a mechanism agreed by social partners in 1990, the Cost of Living Adjustment (COLA) for 2009 should be €5.82, a few cents lower than figures being mentioned in the media.

He said this figure was not the highest ever awarded, as in 2009 the COLA was €6.41, but €2.33 (Lm1) had been given in advance.

Referring to suggestions by the Malta Employers' Association for the government to subsidise the COLA, Mr Tanti said this did not make sense as the money would still have to be collected through taxation.

With regard to the idea put forward by the Chamber of Commerce and Enterprise, for the allowance to be paid in cash and not as part of the salary, Mr Tanti said this too made no sense as workers would lose out the following year.

Explaining its budget proposals in detail, UĦM general secretary Gejtu Vella said the union based them on 12 principles, the most important being the protection and creation of employment.

He said the union was proposing setting up a fund, to be administered by the social partners, for the training of workers who lack basic skills. The UĦM also wants more family-friendly measures, especially in the private sector; a stronger tax compliance unit; and more VAT inspectors and harsher penalties for those who avoid the tax.

The union is also calling for a revision of unemployment benefits and the minimum wage. Mr Vella said the two were so similar there was no incentive for the unemployed to find a job.

The UĦM also called for a Price Watch Agency to protect consumer rights, which has been long in coming.

Another proposal is for a re-evaluation of the mechanism used for the calculation of expenses made by pensioners to ensure the elderly were adequately compensated.

He also called for a review of the Pharmacy of Your Choice Scheme to ensure all those entitled to free medicines actually got them and there was no waste.