Tax cuts might wait until 2012 election year – Labour MP

Labour MP Charles Mangion has called on finance minister Tonio Fenech to explain why an electoral promise to cap income tax to 25% has not yet been kept.

Mangion said the government’s unwillingness to reduce tax was only a confirmation of the way it planned the economy on electoral cycles that benefited only the party’s interest.

“Although administrative measures have drastically reduced families’ purchasing power, and government has saved €80 million on subsidising energy consumption, it is till deferring its electoral promise to reduce income tax,” Mangion said.

“Fenech must explain the fiscal criteria on which government based this promise. Is this 25% tax limit compatible with the ‘medium-term objective’ set by the EU to reduce the deficit to 3% of GDP? Can Fenech confirm if the government’s stability programme for 2009-2012 does not even include a tax cut, meaning this electoral promise won’t happen until 2012? And how has does it account for some €57.5 million in reserves received from the Central Bank in 2007, 2008?” Mangion asked.

The Labour MP said the removal of energy subsidies and the closure of the shipyards offered all the flexibility for the tax cuts to happen. “Using the excuse of the financial crisis, when our banks have held strong, cannot be taken seriously. We need clear answers.”