Call for tax revision

The Chamber of Small and Medium Enterprise - GRTU has called for a radical revision of the taxation system in the next budget in order to help boost consumption and investment.

"Let's start putting money into people's pockets," GRTU director general Vince Farrugia appealed to the government during a news conference.

The retailers' association unveiled its budget wish list yesterday, following the publication of the government's budget strategy document some weeks ago.

Mr Farrugia did not mince words. The government, he said, should stop squeezing money out of people's pockets. The concept of pater familias, where the government believes it knows how best to spend money, is out of date.

Several small enterprises had the potential to grow and create new initiatives but were holding back because of high taxation levels.

Many operators were looking for ways to avoid boosting their income knowing that, if they do, they would fall within a higher taxation bracket.

A large number of businesses were not yielding enough return on their investment, prompting them to put their money into property. Others were looking for greener pastures abroad. It was high time for the government to revise its income tax bands and propose a series of tiers to this effect.

Mr Farrugia argued that no European country charges citizens the highest income tax rate as soon as they reach an annual salary of Lm6,700. Likewise, no EU country taxed citizens on the poverty line.

The GRTU is urging the government to keep divesting itself of property and venture further with its privatisation programme. The government should even sell St Luke's Hospital and the former opera house site in Valletta.

Turning to pensions, Mr Farrugia said the GRTU was dead set against a mandatory increase in the retirement age. Instead, the association believes a full pension should be given to those who have paid national insurance contributions for 37 years.

The GRTU made it clear it would oppose any radical changes to the rent laws. Before taking a decision, the government should weigh the advantages of rent liberalisation against the loss of jobs from enterprises unable to keep up with the high rents.

The GRTU reiterated its objection to the eco tax saying it was introduced haphazardly, leaving a negative impact on businesses.

Turning to tourism, Mr Farrugia appealed to the government to endorse low cost airlines without further delay.

GRTU income tax rate proposals:

Single declaration

Below Lm5,000 per annum - No tax

Between Lm5,000 and Lm7,000 - 15 per cent

Between Lm7,001 and Lm9,000 - 25 per cent

Above Lm9,000 - 35 per cent

Declaration for couples

Below Lm7,000 - No tax

Between Lm7,000 and Lm9,000 - 15 per cent

Between Lm9,001 and Lm14,000 - 25 per cent

Above Lm14,000 - 35 per cent