According to Finance Minister Edward Scicluna, the European Commission's warning over Malta's 2015 Budget plans stems from the fact that it is the only country in the euro area not to publicise new taxes before the budget is read out.

Prof. Scicluna was speaking at a press conference held yesterday after the Commission announced that Malta's budgetary plans were at risk of non-compliance.

The minister noted that unlike the rest of Europe, Maltese governments had developed the custom of not revealing new taxes before the budget is read out, only to start implementing them on the following day. He said that this, in part, aimed to prevent market instabilities, including shortages of goods which were set to face higher taxes before Budget Day.

As a result, he said, Malta did not provide the full details of the tax revisions that were to be included when it submitted its draft budget to the Commission in October. The government was subsequently asked for clarifications, and the full details were submitted. But since the new measures were meant to remain a secret, the Commission was asked not to publicise them.

But Prof. Scicluna explained that in its opinion on member states' draft budgetary plan, the Commission could only consider measures which had been announced. As a result, he added, the fiscal impact of the new measures were not taken into account, leading to the Commission's warning on Malta's budgetary plan.

The minister stressed that the Commission did point out that this year's budgetary plan appeared to be plausible, and that it was nevertheless optimistic about 2015. He also pointed out that the budgetary plan was ultimately accepted, and that the Commission did not ask for any amendments as it had done in 2012, when the government was asked to implement expenditure cuts amounting to €40 million.

Prof. Scicluna announced that the government aims to ensure that the situation is not repeated next year, although it still needed to determine how.

Asked whether this would mean an earlier budget, he said that this would not necessarily be the solution, although he pointed out that next year's budget is set to be announced early since Malta will be hosting the Commonwealth Heads of Government meeting in November.

He said that Malta had to find a way to present information about new taxes without destabilising the market, pointing out that in other countries, planned taxes were often announced months in advance with no such effects.

"Hopefully, we will eventually come to this point," the minister maintained.