Budget 2014 to allocate funds for justice reform

In the first of three public consultation meetings organised by the Ministry for Finance as part of the pre-budget consultation process, Finance Minister Edward Scicluna announced that funds will be allocated for the justice reform.

Without going into detail, Scicluna said he already met parliamentary secretary for justice Owen Bonnici during which they discussed the allocation of funds for the justice reform.

"We held a long discussion over how funds should be allocated. The delay in court cases is costing people time and money," Scicluna said.

Aiming for economic stability with growth that reaches everyone, Scicluna said the budget would focus on the productive capacity of the island. Crucial to this, he added, was the setting up of free childcare centres which would enable more women to go out to work.

Fending of media criticism, Scicluna denied teachers' hours will be extended beyond school hours explaining that after school activities would be extra curricular.

The minister briefly explained government's plans in introducing the third pillar pension. "The worker will be the one to decide how much money he wants to put aside every month depending on how much he can afford," Scicluna said, adding that when the person retires would have something additional to the state pension.

Addressing the well-attended meeting at the Phoenicia Hotel, Scicluna said the government's spending was already restricted in the sense that part of its expenditure was already committed to various items including salaries, pensions and social security.

"What we are looking for is maximising our income and continue attracting investors. The permanent residency scheme is one such example. The Prime Minister's trips abroad also serve to boost foreigners' interest to Malta," he said.

Scicluna said Malta's credibility as a stable country was further evidenced through the US decision to open a justice institute in Valletta. The US government and a number of leading key partners and states are set to establish an International Institute for Justice and the Rule of Law.

Much of the discussion was also taken up by interventions on VAT, income tax and the operations of the inland revenue department.

In this sense, the government will be introducing new changes in VAT legislation to see the interest rate on tax dues decreased from 9% per year to as low as 6%. The government also plans on capping the administrative penalties for VAT registration.

But Scicluna also wants to see a fairer system by which inspectors from the various tax departments operated. He explained that one business owner had complained being targeted by the tax compliance unit "for the wrong reasons".

The tax compliance unit carries out random inspections of businesses or person considered to be "high risk". The individual would be chosen randomly, by ballot.

"But where is the guarantee that this person was chosen randomly?" Scicluna said.

He went on to recount a personal experience while attending the Birkirkara feast. "I couldn't believe my eyes when I saw two VAT inspectors walking in asking the bar owner for VAT receipts. I wanted to see whether this was norm or whether it happened out of the blue," he said, insisting there was "time and time" for such operations.

Reiterating the key for economic growth was to invest in different sectors and diversify the economy, Scicluna reassured those present that government was on track to reducing the deficit to under 3%.

"The economy is getting back on its feet. Only last month, retail trade increased by 6%."