The race to zero taxes

Maltese politics is going through a very interesting process where the rival main political parties keep competing each other by increasing their promises or measures on tax reductions. These tax reductions, which started by the Labour government mostly on low-income earners, are now also a main policy point of the Nationalist Party which is also proposing to further reduce taxes for low-income earners including on income from part-time and over-time work.

Apparently, PN even intends to to bring the property tax for first-time buyers down to zero so as to help first-time home buyers with their very challenging property purchases. Property prices are becoming ever more increasingly unaffordable for young couples and workers with an average salary. One of the measures that the Labour government has introduced to supposedly provide help for these couples is to reduce the tax on their first-property purchase.

As has been stated regularly here, the problem with these policies and these press conferences by the Nationalist Party is that they are not being effective in winning over workers who are benefitting from Labour’s incentives, especially pensioners, and neither is it successfully gaining the attention of the significant amount of the population that is at risk of poverty.

Consecutive tax reductions on low-income earners by the Labour government have not proved significant to address the surmounting gap between the average wage and property affordability and this is why PN’s proposals are falling on deaf ears. The Opposition needs to be able to communicate an alternative economic plan to the Labour government’s which inspires hope in the average salary earner. So far, PN is trying hard to present itself as a better version of Labour as it fails to present a definite alternative vision for the country.