Fabian Demicoli

Malta’s Draft Budgetary Plan 2015 sheds more heat than light:


GRTU calls for immediate
discussions prior to Budget announcements – Whilst the draft plan presented
to the European Commission gave an overview of the overall economic direction
the next Budget will be taking, GRTU felt it lacked basic vital information to
help comprehend how the set targets will be met.

In the document Government has committed itself
to continue the shift from direct to indirect taxation. It mentions indirect
taxation on consumer goods and services and a revision in fees on market
output. The questions that we naturally pose are: How will these indirect taxes
be implemented? What is meant by market output?

During a business breakfast earlier this month
GRTU probed the Minister for Finance to take action, as was promised in Budget
2014, on Eco Contribution. In reply the Minister stated that, similar to the case
with the payment of Maternity leave, Government will be moving from direct to
indirect taxation. This means that businesses will still be footing the bill
indirectly instead of directly. What benefit to business this might result in,
in relation to Eco Contribution, is dubious.

Whilst GRTU welcomes Government's commitment
not to increase VAT it should be made clear that VAT is not the only tax
element that affects prices and competitiveness. Many businesses are today
forced to carry the burden of Eco Contribution, which is an unjust and
anti-competitive tax, and simply changing its name will not make it any more
just or competitive. The biggest problem with Eco Tax is unfair competition and
introducing more taxes, be it direct or indirect, will only continue to
aggravate the already precarious situation.

All social partners have had the opportunity to
raise their priorities and concerns for the next Budget at MCESD and GRTU
raised the issues, amongst others, of unfair competition and the eco-tax
problem on several occasions now and no concrete replies on this or discussions
on the plans were held. We unfortunately get the feeling that plans are in
place but Government is reluctant to discuss them.

GRTU calls on the Government to avoid at all
costs a situation where any plans on these highly sensitive issues are unveiled
only once the Budget speech is read. We reiterate, MCESD is not a talking shop
and it is evident which stakeholders have a clear interest in the issues.
Government should come to MCESD with the intent of really discussing the plans
or speak directly to social partners to make sure an agreement is reached
before any final announcement.

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