Finance Minister Tonio Fenech said today that the government will next year invest €31 to the Malta Tourism Authority .

"We shall continue to enhance the accessibility towards our country and to invest in supporting various airlines. For the coming year we shall add new routes. We shall also enhance our advertising and marketing aggressively in our principal markets and we shall also consider new markets such as the Middle East."

Mr Fenech said a study carried out following agreement with the Malta Hotels and Restaurants Association on the economic and financial viability of reducing the VAT rate on restaurants from 18 to 5 percent showed that the economic yield would only be 0.2 percent, which would increase to 0.6 percent in 2011. However, Government revenue would decrease by 29 million euro in 2010 and by 23 million euro in 2011.

"The experience gained from other countries, where such a measure was taken, shows that such a reduction is not passed on to the consumer, and that its economic impact was relatively low.

"Above all, the study undertaken shows that, if this measure is taken, the tourist industry will not benefit much. For this reason, on the basis of all this evidence,

Government believes that it should not take a measure that will be of little benefit for both the consumer and the economy, and which at the same time will lead to new taxes to make up for the loss of revenue," the minister said.