Income tax cuts, cheaper utility tariffs part of Budget 2014
According to pre-budget consultation document government expecting economy to grow at an average rate of 1.4%.
The income tax cuts as proposed by the PN administration last year, a 25% reduction in utility tariffs and the introduction of the third pillar pension are part of the Budget 2014.
Launching the pre-budget consultation document, Finance Minister Edward Scicluna insisted that government's priority was to sustain stability.
"The government's priority is to remain on track with its plans on reducing deficit. This will in turn help us analyse the projects and initiatives which the government can invest in," Scicluna said during the presentation of the document to members of the media.
While social partners and civil society will be receiving the report now, MCESD will be discussing it on 2 September. "It will give them enough time to go through the document... and serve as holiday reading as well," the finance minister said.
Scicluna reassured that the "stable" economic outlook allows government to go ahead with the planned tax reduction and other promised measures such as utility tariff reductions.
"While it is true that the tax reduction was inherited from the previous government, there is nothing which is stopping us from implementing it. It gives incentives to households with a certain high level of income, especially households where both parents work," he said.
The minister said the government wanted to stabilise the tax burden. Currently, the income from taxes amounted to 42%. While the top rate of income tax will be reduced, Scicluna did not exclude government would find "alternate sources" to generate revenue.
He however reassured that government's ultimate goal was to have a fair and equal distribution of wealth.
"The budget will address those who are in need. It will tackle economic growth which will be distributed among the different social strata."
Scicluna said the macroeconomic stability was important for both investors and businesses. According to macroeconomic indicators, in 2013 the Maltese economy is expected to grow at an average rate of 1.4% in real terms. In 2014, the Maltese economy is expected to register a real GDP growth rate of 1.6%.
Scicluna said the unemployment rate was expected to decrease to 6.3% during 2013 and remain stable during 2014. Data for the first quarter of 2013 showed an increase of 2% to 45.8% in female employment rate.