'It's a mess' - Clyde Caruana slams PN's proposed tax cuts
Finance Minister says Opposition's calculations do not add up, will cost €230 million more
Updated with PN reaction
The incumbent Finance Minister on Thursday slammed the Nationalist Party’s proposed tax cuts as a “whole mess”, arguing their maths did not add up.
Pointing to calculations presented by PN leader Alex Borg and shadow finance minister Adrian Delia, Caruana said the proposed tax cuts would cost far more than the “€110 to €130 million a year” the PN claimed.
“This is a big mistake, actually it’s an entire mess,” Caruana said.
“A simple calculation (multiplying 300,000 workers by €1,200) shows that the measure will at least cost €360 million- more than double what they budgeted for”.
On Thursday morning, the PN leader had said the proposed tax cuts would be introduced “gradually over two years” with an initial cost of around €110 million to €130 million per year.
However, Caruana argued the PN pledge shows that the opposition is “not prepared to govern and lacks credibility”.
“Whatever the PL is pledging, it is doing so with credibility and responsibility - whatever we do we are sure of the numbers,” he said.
On Wednesday, the PN had also presented details of their plan to eliminate all succession tax on inherited family property and businesses.
Reacting Caruana said that policy will disproportionately benefit people who are better off.
He added that expanding tax bands - especially applying the 35 per cent maximum threshold from €80,000 rather than the current €60,000 – would have a similar effect, benefitting those who earn more.
However Caruana did not go as far to describe the policy as regressive even when pressed.
The finance minister said that Labour’s fiscal proposals have social justice at their heart which is why the proposed “super bonus” of €1,000 yearly will apply to all.
In response to the PN’s pledge to cut all succession tax on inherited family businesses, Justice Minister Jonathan Attard revealed a new PL government would cut this tax from 5% to 1.5% “permanently”.
Even if a business owner dies during the process of donating a business, the lower rates will apply, Attard added.
Government in panic - PN
In a statement, the PN said its proposal is “serious and responsible” and would provide a minimum annual benefit of €1,200 to every taxpayer through tax cuts and a refund mechanism.
The PN said the €130 million figure represents the net additional cost after accounting for revenue generated through higher consumption and VAT, while accusing the government of “political panic” and insisting that the proposal could be implemented without affecting essential services.