[WATCH] PN proposes 10% income tax on earnings up to €20,000

The Nationalist Party is proposing slashing income tax to 10% for those earning up to €20,000, in a bid to further stimulate the economy and improve people’s quality of life.

Party leader Simon Busuttil made the announcement this morning during a press conference, where he said the PN’s package of tax cuts “confirms the Party’s desire to change the Maltese economy to one that is for the people”.

“We want to create an economy that works for everyone, especially the weakest among us,” Busuttil said.

He said the package would, in addition to stimulating more economic growth, encourage businesses to expand and move into new sectors.

Busuttil said the “radical measures” would cost roughly €44 million and will impact some 121,000 workers and was an example of “social justice in practice”.

The PN’s second proposal, Busuttil said, was a reduction in income tax for part-time workers, from 15% to 10%, which effectively extends the first proposal to part-time workers.  

“This will apply to those working part-time and also those who are self-employed and work part-time hours,” he explained, adding that the proposed measures would leave €3.8 million a year in worker’s pockets and affect 5,485 self-employed part-timers and 23,000 part-time workers.

In order to stimulate the self-employed and small business sectors, Busuttil said the PN was be proposing a 10% rate of income tax on their first €50,000 in profits.

“This is a measure that will not only generate more economic activity, but will also contribute to the reduction in tax evasion because it will make more sense to pay 10%, than to think of ways of avoiding it,” Busuttil said.

The PN is also proposing to remove the excise tax on cosmetic product which was introduced in the last budget by the Muscat government.  

To stimulate small and medium enterprises, the PN leader said a government led by him would see to it that the Malta Development Bank’s capital is increased by €360 million. This, he said, would be used to offer loan guarantees that would vary between €25,000 and €250,000, and would be aimed at helping start-ups invest in innovation, efficiency and internationalisation.

A PN government would also reduce tax on profits which are re-invested in a business, Busuttil said.

“We all know that many businesses take their profit and reinvest it,” Busuttil said. “Today, this profit is fully taxed but we are proposing to reduce tax on this profit to 15%.”

He said this would apply to the first €40,000 in profits and would offer an incentive for reinvestment, and therefore the creation of more economic growth.

Busuttil said the PN was proposing full exemption on income tax for “innovative businesses”, saying that one of the main criticisms of the current administration was fact that it had not created any new sectors for the Maltese economy and that this measure would help develop new sectors. He insisted that the government should have the “economic vision” to create new sectors.   

Busuttil would not comment when asked for a reaction on finance minister Edward Scicluna’s remarks yesterday that the PN’s “everything for everyone” proposals would reduce the incentive to work that has seen so many people join the workforce over the past four years. He insisted that he was disappointed that Scicluna was defending the indefensible by not disassociating himself from the Prime Minister Joseph Muscat, his chief of staff Keith Schembri and minister Konrad Mizzi.

“Edward Scicluna too must be held responsible for not disassociating himself. He has a great responsibility towards the sectors that find themselves at risk, like the financial services, gaming, digital gaming and technology sectors,” Busuttil said.  

“They are all waiting for result to know whether we prefer corruption or clean politics in our country.”

Busuttil also criticised civil liberties minister Helena Dalli, over what he referred to as undignified behaviour towards Partit Demokratiku leader Marlene Farrugia during yesterday’s Broadcasting Authority debate.

He accused Dalli and the Labour Party of passing sexist remarks about former Labour whip Godfrey Farrugia and his partner Marlene Farrugia, insisting that the behaviour was contrary to the “liberal mask” worn both Dalli and the Prime Minister over the past four years.

“Rather than increasing women’s role in society, Joseph Muscat has actually reduced it so there is a great difference between his words and actions,” he said.