Malta Needs Tax Cuts Now!

[Gladiator]

Government proposing cutting tax bill by Lm8 million


Sunday Times, August 6, 2006


http://www.timesofmalta.com/images/20060806_loc_02.jpgPrime Minister Dr Lawrence Gonzi with Parliament Secretary Tonio Borg at yesterday's announcement of the pre Budget document 2007. Photo: Matthew Mirabelli.
The government yesterday proposed cutting taxes by Lm8 million in its pre Budget document 2007.
The document does not contain measures for the next two years, till the election is due, {fools after bleeding the taxpayers now he gives somthing back.}the Prime Minister said after he launched the measures forming part of a plan for the next decade.
"This is the new phase of our programme for the country's economy," he said.
The document, launched by Dr Gonzi and Parliamentary Secretary Tonio Fenech at the Auberge de Castille yesterday, gave a general positive snap shot of the economy, taking into account figures for the past six months as well as projections for the coming year.
The document identifies a number of measures, which indicate, in broad strokes, where the government believes the cuts should be made. The only defined objective, however, is to contain the cuts to some Lm8 million; a figure which it is estimated would not jeopardise the government's overall financial targets and euro introduction ambitions. He has very little room to cut. Cut the public spending clown.
The thrust of the presentation had, as its underlying factor, meeting the EU's Maastricht criteria in time for euro entry by next year, a target that Government seems confident it will reach.
A number of the proposals were revealed by The Times and other newspapers over the past week. The document is proposing changes to the income tax bands,{God knows what this means? It's sure not a tax cut.} a lowering of the controversial departure tax A lowering not a removal?and also the introduction of an energy benefit, a subsidy aimed at alleviating the surcharge on utility bills. hehehe otherwise you will still be stuck with high energy costs.
It also proposes incentives for part-timers and for private pension schemes, and a family benefit, paid over and above the children's allowance, as an incentive for childbearing. These are not tax cuts but welfare hand outs. Surley the economy can do without.
"We have been modest in our proposal limiting the projected tax cut to Lm8 million because we don't want to jeopardise what we have achieved so far," Dr Gonzi said. "Now we want the people and the social partners to give their input, even if it is critical." Yeah right. You won't stop from hearing all the bitching.
In general terms, the picture presented yesterday was a positive one, save for tourism, in which, Government acknowledges, targets have not been achieved.
When asked, Dr Gonzi admitted that the target set out in the 2005 budget of a 50,000 increase in tourists per year over three years will not be achieved this year either. hhehehe We all know about the disaster in this industry.
Overall, however, the situation portrayed looks better. The GDP rate for the first quarter of this year stood at 3.1 per cent, Yeah we believe you Gonzi? confirming a positive trend over the same period for the past four years. The f... economy has been stagnant for the last four years. Where is the real growth?
On the other hand, the rate of public debt as a percentage of the GDP is on the decline at 68.8 per cent,ooppps Still high must come down to 65%compared to 72.5 per cent last year, and deficit reduction is on track and projected to end the year at some Lm55 million or 2.7 per of the GDP - below the euro's three per cent convergence criteria. Very good thanks to sacrificing growth and consumer spending confidence.
Inflation, however, remains a key preoccupation, standing above the EU reference value. Please tell us what is the inflation rate? 3.7% one of the highest in Europe!Yet, while it is a factor which needs to be "kept in check", in Mr Fenech's own words, commenting on the recent exclusion of Lithuania from the Eurozone, precisely because of its high inflation rate, he said Malta's situation is different since the rate here has a history of fluctuating in the range of the reference point. Whichever that means?Conversely, Lithuania's rate of inflation was found to be consistently above average and was expected to rise.
Foreign direct investment is improving and stood at Lm298 million, a seven per cent increase on the previous year. Internal consumption has also increased, a factor, which, according to the government, along with foreign investment served to boost economic activity in the past year and a half or so. We are not sure though?
As for unemployment, while admitting that the figure is currently slightly higher than during the same period last year, Dr Gonzi said it was clear that the country was creating jobs, pointing out that the massive lay-offs that characterised the latter part of last year have been almost completely absorbed. heheh where did they find alternative employment?
Moreover, Government has trimmed its workforce by 2,500 since 2003.
Exports are also up over a disappointing 2005, which sealed off a negative three-year period. But tourism keeps pulling the figures down in this respect. In fact, even more drops in earnings are being forecast, confirming a trend experienced in the past years. Man I tell you those economic figures are too much for these two idiots.:p
While, overall, the number of tourist arrivals increased last year from 1,118,234 in 2003 to 1,170,610, gross tourism earnings per capita dropped from Lm243.40 in 2003 to Lm224.90 last year. Gross foreign exchange earnings also saw a general drop from Lm272.2 million in 2003 to Lm 263.3 million in 2005. Looks there was no trouble in putting these figuers in the red.:o Answering questions, the Prime Minister referred to the Malta Tourism Authority's branding process and the call for expressions of interest on specific routes for low-cost carriers, which is also in the process of being decided upon. Take your time fool while other destinations are taking Malta's tourists, with the exception of Beirut.:eek:
"We are concerned with the sector, we are suffering from heavy regional competition and, while countries which compare to us are faring worse than us, it is no consolation.
"The government is directing resources at the sector and will continue to do so, but it is not just the government that has to do its bit; we all have to play our part," he said. Yeah, fire dak lazin ta Ministru as a start.:D

Keep on dreaming Gonzu:p

[Marco Polo]

elections are coming!

[Gladiator]

He won't win the elections on this type of Tax Cuts. If one should call them tax cuts????:eek:
In other countries Gonzu will be laughed at if he dares to come out and propose something like this.

[dust commander]

He won't win the elections on this type of Tax Cuts. If one should call them tax cuts????:eek:
In other countries Gonzu will be laughed at if he dares to come out and propose something like this.

Glad, the key words are TAX CUTS, there are 200,000 voters so there are 200,000 definitions of "tax cuts". You encourage women to have more children and pay them for it is NOT a tax cut, it's a burden on government spending for the rest of the child's life.:confused:

[Marco Polo]

Glad, the key words are TAX CUTS, there are 200,000 voters so there are 200,000 definitions of "tax cuts". You encourage women to have more children and pay them for it is NOT a tax cut, it's a burden on government spending for the rest of the child's life.:confused:

what you do is you cut taxes on couples with kids. this would encourage families and cut our population decline. this should have happened 10-15 years ago though.

[umberto]

There are some measures to that effect, though i doubt their effectiveness.

Short term financial solutions are no real solution. It all depends on property prices, and the value for money in terms of space. Prices are going up, while household space is going down. For good quality rearing, space is required as much as time and money.

[dust commander]

There are some measures to that effect, though i doubt their effectiveness.

Short term financial solutions are no real solution. It all depends on property prices, and the value for money in terms of space. Prices are going up, while household space is going down. For good quality rearing, space is required as much as time and money.

Introduce property taxes and make same property taxes AND mortgage payments tax deductable. Reduce taxes on businesses, reduce taxes on individuals instead of raising the exemption level and raise the taxes on individuals making more than 100,000 a year. Reduce the vat instead of the departure tax, not that many people are affected by that anyway. Get into the mortgage business, that's where the money will be made.

[Marco Polo]

There are some measures to that effect, though i doubt their effectiveness.

Short term financial solutions are no real solution. It all depends on property prices, and the value for money in terms of space. Prices are going up, while household space is going down. For good quality rearing, space is required as much as time and money.

property can be tackled via "trust busting" as well as gladiators suggestion or something that would have a similar effect.

cost of living for families should be brought down.

[Gladiator]

property can be tackled via "trust busting" as well as gladiators suggestion or something that would have a similar effect.

cost of living for families should be brought down.
In Malta no government can control the cost of living i.e. the inflation rate, cause Malta imports more than it exports. So Malta is already importing higher costs from outside. Example the cost of crude oil. Malta has no control over the price of crude at which it buys its energy needs.

The Labour Government in the 1970s tried to control prices and look what had happened, goods shortages. No importation or low quality goods. Bluk buying? You should know this?

[dust commander]

Gladiator wrote..[quote]
The Labour Government in the 1970s tried to control prices and look what had happened, goods shortages. No importation or low quality goods. Bluk buying? You should know this? [quote]........ So did that great Canadian statesman Pierre Elliot Trudeau. He introduced wage and price controls the only fuckin problem was that only the wages were controlled, and this from the Greatest prime minister in the second richest nation with resources coming out of our ass.

[Marco Polo]

property can be tackled via "trust busting" as well as gladiators suggestion or something that would have a similar effect.

cost of living for families should be brought down.
In Malta no government can control the cost of living i.e. the inflation rate, cause Malta imports more than it exports. So Malta is already importing higher costs from outside. Example the cost of crude oil. Malta has no control over the price of crude at which it buys its energy needs.

The Labour Government in the 1970s tried to control prices and look what had happened, goods shortages. No importation or low quality goods. Bluk buying? You should know this?

nowadays i would class mortgages and tax as living expenses. both can be tackled. tax deductions should start from the family and work out and then up and the property cartel should be seen to. its only causing future problems and a bubble as it is. the prices are false.

[Gladiator]

[quote=Gladiator]

nowadays i would class mortgages and tax as living expenses. both can be tackled. tax deductions should start from the family and work out and then up and the property cartel should be seen to. its only causing future problems and a bubble as it is. the prices are false.

Yes of course there is a an artifical bubble and you only burst it by increasing interest rates or property taxes. As for tax cuts, they have to be across the board, or total removal of personal Tax and 3% reduction in VAT.

To instill consumer confidence spending. Now go and phone Gonzu with your ideas and see what he will tell you.:D With these proposals you may even win the Nobel Prize for Economics!:D

[Marco Polo]

[quote=Marco Polo]

Yes of course there is a an artifical bubble and you only burst it by increasing interest rates or property taxes. As for tax cuts, they have to be across the board, or total removal of personal Tax and 3% reduction in VAT.

To instill consumer confidence spending. Now go and phone Gonzu with your ideas and see what he will tell you.:D With these proposals you may even win the Nobel Prize for Economics!:D
across the board tax cuts have to come later. why do like bush and help those who can afford it? im no socialist but id rather relieve families than a fat cat. our end goal is still to cut all taxes across the board though.

property just needs something that will not cause a crash but will stop the artificial price inflation or at least far lower inflation. perhaps an incentive to open up empty dwellings would be better? maybe instead of taxes on property the income gained from renting or selling such dwellings (already owned only) would incur lower tax for a few years until prices gain some sanity and reflect earnings a little better.

actions must not cause a crash but prices cannot increase by insane amounts. all it will produce is a crash as is. who can afford a 40k shoebox?

[Gladiator]

property just needs something that will not cause a crash but will stop the artificial price inflation or at least far lower inflation. perhaps an incentive to open up empty dwellings would be better? maybe instead of taxes on property the income gained from renting or selling such dwellings (already owned only) would incur lower tax for a few years until prices gain some sanity and reflect earnings a little better.

Haven't I mentioned this before. The purpose of the property tax will bring the price of property. All the empty units will have to sell asap. Who would want to pay tax on an empty plot?

Remember flood the market. More Supply than demand. Basic economics. price will go down.

[etoile noir]

Haven't I mentioned this before. The purpose of the property tax will bring the price of property. All the empty units will have to sell asap. Who would want to pay tax on an empty plot?

Remember flood the market. More Supply than demand. Basic economics. price will go down.
you're totally right of course, however you seem to forget who the landowners are.

hitting the landlords with a property tax is something no government will ever do. i remember AD trying to lobby for some law to revise old rent laws - there are quite a few people in malta living in houses and paying somewhere along the lines of LM50 liri per annum for their abode.
did they manage? like heck they did! the law still stands as is, with landlords receiving a pittance for their property, and lessees paying close to nothing.

what you're suggesting is exactly the opposite. hitting the landlords rather than the tenants. both ways they're screwed really. the tenants are the voters and the landowners of today are the financiers of the 2 main political parties.

and joe public continues to be royally screwed by whoever is in power :rolleyes:

[Gladiator]

I see your point EN.
However the purpose of the porperty Tax will have a multi objective in Malta.

a. Prices will come down no matter what. More supply than demand.
b. Control of the environment and preservation. No point of building anymore if the unsold units are not sold first. This includes commercial buildings too.
c. The tax will bring in more revenues than personal income tax.
d. Tax the property, which is not being use for agricultural production.
e. Stricter building codes if the tax is based on what is called the Mill rate! ( Bil-qasba) or a percentage of the market value? No abuse of land. Why build huge houses?
Have I missed anything else?

Oh yeah, those political kazini will sell like hot cakes as the two main political parties will no long afford to pay tax on empty premises.:D

[dust commander]

[quote] what you're suggesting is exactly the opposite. hitting the landlords rather than the tenants. [quote]

Tax the owner (he owns the PROPERTY) he in turn will pass a percentage of it on to the tenant. When properties are leased they should only be leased for not more than 5 years, not this 99 years and no eviction crap. This way the owner gets his money back and re-invests in other properties. If the tenant feels that he's paying too much, then it will be an incentive for him to buy his own property. It works in the rest of the world, why not in Malta.

[etoile noir]

[quote] what you're suggesting is exactly the opposite. hitting the landlords rather than the tenants. [quote]

Tax the owner (he owns the PROPERTY) he in turn will pass a percentage of it on to the tenant. When properties are leased they should only be leased for not more than 5 years, not this 99 years and no eviction crap. This way the owner gets his money back and re-invests in other properties. If the tenant feels that he's paying too much, then it will be an incentive for him to buy his own property. It works in the rest of the world, why not in Malta.

actually the 99 year and no eviction thing is only in force for those agreements entered into prior to june 1995. "only" being a relative word or couse, since this particular only constitutes quite a large segment of the population.

in june 1995 a law was enacted which states that properties cannot be leased for longer than 4 years max. after the 4 years there has to be an increase in rent otherwise the lease agreement is null and void.

it is working in malta - but only for those who have leased after the "new law". those many families who still live in houses governed by the old laws can still remain there - almost perpetually. yes, there's yet another law. this one states that if the old geezers who occupy the property have a son/daughter who still lives in the abode with the parents, then the offspring has the right to continue to live there under the same terms and conditions as the parents. naturally said law also applies to the offspring of the "new" sitting tenant.

cool huh? :rolleyes:
and no ..... i am no property owner! coz i'm starting to sound like some caqnu now :eek:

[dust commander]

[quote] and no ..... i am no property owner!

You don't have to be a property owner to realise that what you just said about offsprings does not make sense. Believe it or not it is better for the tenants too because they'll have a wider choice of rental properties. If I knew that I'm gonna get my money back in a reasonable time by renting I'll invest in more properties coz after I get my money back, the properties are still mine. Do the Maltese understand that, though.

[Marco Polo]

if the tax is introduced it will cause the crash. i like the idea but the present bubble needs to be deflated slowly. we cant just pop it as we will bancrupt the island! dont forget that the population is stopping its growth. property development is going to go through hard times in the next 20 years anyway so it needs cushioning. a property crash would be a disaster.

[dust commander]

if the tax is introduced it will cause the crash. i like the idea but the present bubble needs to be deflated slowly. we cant just pop it as we will bancrupt the island! dont forget that the population is stopping its growth. property development is going to go through hard times in the next 20 years anyway so it needs cushioning. a property crash would be a disaster.

It will only bankrupt the speculators and it looks good on the greedy bastards.

[Marco Polo]

It will only bankrupt the speculators and it looks good on the greedy bastards.

no it wont.

what about all those couples who have just bought a house and cant even afford to start a family or worse still have a couple of kids and are paying their loan! prices will drop big time and we can say bye bye to a badly needed stable fertility rate as well as a collapse in peoples personal wealth. most of the common mans equity is tied up in his property.

if a couple own a house now worth 50k and have 30k worth of debt on it and then property prices crash and its value falls to 30k what happens? it means they have how much equity left? sod all is what they have! they own nothing in reality, not even part of it.

[shadow cup]

The land was never intended for ownership by the ants that scurry upon its surface. Exploitation perhaps... but not ownership, because the land is relatively eternal while the ants are fated to pass from dust to dust.

One day humanity will awaken to the next step of evolution...

[dust commander]

All doom and gloom.....who says that the prices will drop if you introduce property taxes??? I'm not saying slap THOUSAND LIRA right away, I'm saying gradually introduce it over say a ten year period. There might be a little blip at the start but then it will strengthen the industry and there will be more property for sale or rent. Stability in prices.;)

[Gladiator]

no it wont.

what about all those couples who have just bought a house and cant even afford to start a family or worse still have a couple of kids and are paying their loan! prices will drop big time and we can say bye bye to a badly needed stable fertility rate as well as a collapse in peoples personal wealth. most of the common mans equity is tied up in his property.

if a couple own a house now worth 50k and have 30k worth of debt on it and then property prices crash and its value falls to 30k what happens? it means they have how much equity left? sod all is what they have! they own nothing in reality, not even part of it.

That's called risk Marco in a free market economy. What about when prices stabilze as dust_Commander said and then go up with inflation?

In the USA a homer owner can claim his or her mortgage in their income tax return.:p

[Marco Polo]

That's called risk Marco in a free market economy. What about when prices stabilze as dust_Commander said and then go up with inflation?

In the USA a homer owner can claim his or her mortgage in their income tax return.:p

but why do it if there is no need to be so drastic at once? our priority should first be to stop the increase, a crash would be a disaster. the reasons why this happened can be sorted later, if need be we can introduce property tax when the prices are sane. with todays income a small apartment in a 'normal' area such as marsascala should not sell for more than 30-35k max.

[Gladiator]

but why do it if there is no need to be so drastic at once? our priority should first be to stop the increase, a crash would be a disaster. the reasons why this happened can be sorted later, if need be we can introduce property tax when the prices are sane. with todays income a small apartment in a 'normal' area such as marsascala should not sell for more than 30-35k max.


Price control are just as bad as taxing the property according to you. The crush will not be sudden and the tax can be paid monthly, six months or once yearly! During that time a lot may happen to prices over all.
But your income tax is deducted every week or two weeks or monthly.

[Marco Polo]

Price control are just as bad as taxing the property according to you. The crush will not be sudden and the tax can be paid monthly, six months or once yearly! During that time a lot may happen to prices over all.
But your income tax is deducted every week or two weeks or monthly.

as soon as the word tax is mentioned i am sure there will be a flood to sell or to lease. if either happens the demand for property will drop suddenly and so will prices. the ripple effect will be disasterous.

i do not agree with price controls but this is a false bubble that needs deflating. popping it would not be good. later we can sort out the market including tax if need be.

[Maltese80]

People will not want to buy old properties. For example in the main street of Hamrun, there are a lot of abandoned houses, no wonder, the place is a hell to live in with all that air pollution and traffic.

Another example is the old part in Zebbug, with very narrow roads and abandoned old houses. Who will want to live in an area where you have to drive and reverse and pray all the time no cars are coming from the opposite direction?

[etoile noir]

People will not want to buy old properties. For example in the main street of Hamrun, there are a lot of abandoned houses, no wonder, the place is a hell to live in with all that air pollution and traffic.

insomma M80, pollution is everywhere. a person who was born and bred in hamrun and wants to remain within the family unit will stay there.... especially if the price is right.

Another example is the old part in Zebbug, with very narrow roads and abandoned old houses. Who will want to live in an area where you have to drive and reverse and pray all the time no cars are coming from the opposite direction?
here i disagree with you. what with "houses of character" sprouting everywhere, zebbug will become as sought after as lija, attard etc. much in the same manner as siggiewi did.

besides, i live in fancy old st julians and you could very well be describing my street with drive/reverse etc. its my nightmare every time i leave or arrive home :mad: u san giljan dan!

[Maltese80]

insomma M80, pollution is everywhere. a person who was born and bred in hamrun and wants to remain within the family unit will stay there.... especially if the price is right.


Could be, but having lived in quiet Dingli all my life, I cannot imagine someone living in all that chaos!


here i disagree with you. what with "houses of character" sprouting everywhere, zebbug will become as sought after as lija, attard etc. much in the same manner as siggiewi did.

I wonder how their SUVs will pass from those roads though ;)

[shadow cup]

The older buildings had an excuse... the new ones have only bad management to blame and the policy of cramming more vehicles into Malta is only excacerbating the situation further...

Some aspects of life were never 'meant' to be individual in nature. Collectivism could theoretically work a lot better on such levels as transportation... where the system is right... which is far from the case in little, polluted, over-crowded, maltreated Malta. ~_~;

[Marco Polo]

People will not want to buy old properties. For example in the main street of Hamrun, there are a lot of abandoned houses, no wonder, the place is a hell to live in with all that air pollution and traffic.

Another example is the old part in Zebbug, with very narrow roads and abandoned old houses. Who will want to live in an area where you have to drive and reverse and pray all the time no cars are coming from the opposite direction?

there are far more places than hamrun. there are lots of new properties that have been empty for ages.

as for zebbug, have you ever heard of lija?

[Gladiator]

The thread is about Malta Needs Tax Cuts Now, not pollution! The reason is that Gonzo thinks that he is giving a tax cut! These are not tax cuts but welfare hands out. Obviously something the Maltese Economy can't afford. More cuts are needed in the public sector, that's for sure.

Outright tax cuts will stimulate the economy and instill consumers' confidence, which the Economy needs badly.

The rest will fall in its place. Trust me on this one.:p

[Marco Polo]

The thread is about Malta Needs Tax Cuts Now, not pollution! The reason is that Gonzo thinks that he is giving a tax cut! These are not tax cuts but welfare hands out. Obviously something the Maltese Economy can't afford. More cuts are needed in the public sector, that's for sure.

Outright tax cuts will stimulate the economy and instill consumers' confidence, which the Economy needs badly.

The rest will fall in its place. Trust me on this one.:p

true we did veer off a little. i agree with you on income tax at least. we need taxes reduced in ways that will stimulate maltese business (exports, tourism etc). i dont agree with a vat reduction as that encourages people to spend on foreign imports.

[umberto]

pollution, narrow roads, parking crises, over-development.....our country has reached its population limit long time ago. it cannot sustain anymore.

a stable population has to be maintained, sustainable, but for sure, an ever growth is not possible here.

every population needs its space to live comfortably, quality life.

[dust commander]

true we did veer off a little. i agree with you on income tax at least. we need taxes reduced in ways that will stimulate maltese business (exports, tourism etc). i dont agree with a vat reduction as that encourages people to spend on foreign imports.

Isn't everything you buy over there imported? Tax cuts stimulate the economy, any kind of tax cut. Allowing people to claim their mortgage payments as expenses will do wonders for home buying, ask anybody in the states. Cutting the vat will get people to spend that saving on other stuff. You cut just income tax will allow MISERS to keep on hoarding their money away from the gov. so they don't have to pay anything. The reason property taxes went sky high over there is because the Gov. allowed foreigners to enter the buying market with supposedly certain restrictions. And their earning power is four times that of Maltese.