The best option to review the income tax bands is to extend the onset of the maximum rate of tax, rather than reduce the maximum rate of 35 per cent marginal tax, the Malta Employers’ Association said yesterday.

In its document, the MEA covers a wide range of issues, such as measures to improve the economy and competitiveness, the revision of the income tax bands, tourism, the labour supply and the changing economic scenario.

The association said it welcomed the government’s intention to reduce the overall tax burden by Lm8m. On income tax, the MEA said the government should shift the tax burden away from direct taxation to indirect taxes, because it would be more difficult to evade indirect than direct taxes.

The MEA is proposing that National Insurance (NI) should be paid according to hours worked instead of a minimum NI payment. The idea is to combat undeclared employment. The present situation was making it difficult for employers to recruit part-timers, the association said.

MEA has proposed a number of fiscal revisions, such as lowering the airport departure tax, tax incentives for expenditure on training and development of employees, tax incentives for married female workers in self-employed businesses and the imposition of a flat rate of 15 per cent on income from rent. This would be an incentive for property owners to rent unutilised property.

Other areas discussed by the MEA include the management of occupational and geographical labour mobility, limiting the brain drain and the introduction of early opt-outs from the labour force. The MEA is also in favour of increasing labour participation.

The MEA yesterday criticised the overall direction of Malta’s tourism policy.

Association President Pierre Fava compared the present situation in the industry to “a TV drama”. MEA director general Joe Farrugia said the introduction of low-cost carriers is expected to attract a large number of visitors to Malta and improve the country’s marketing mix.

He said the impact of low-cost carriers should be monitored to analyse their net effect on the economy. Mr Farrugia also called for an evaluation of the Brand Malta campaign.

The MEA said that marketing goes beyond promotion and that the product in general still leaves much to be desired. The association called for stricter enforcement of the standards of tourist related services, the upgrading of heritage sites, better management of infrastructural projects, especially tourist related ones and the promotion of health tourism and Malta as a diplomatic hub.

With regard to Gozo, the MEA is calling for the upgrading of public transport through the introduction of two intersecting circular routes, the introduction of a regular shuttle service from the airport to Cirkewwa, the promotion of organic farming to project the island as a natural haven, the rehabilitation Gozo’s heritage sites and development of pedestrian areas and country walks.