Finance Minister Edward Scicluna told The Malta Independent that the government will not be raising Value Added Tax (VAT).

"In the draft budget which we presented to the Commission we said that the indirect taxes will not be VAT. They are indirect taxes that are not VAT."

Asked if these indirect taxes will be more than the usual hikes in alcohol and cigarette prices, Professor Scicluna would not give anything away.

"They are not direct tax and they are not VAT," he said.

The pre-budget document says that earnings from the government citizenship scheme will bring in 0.6% of Malta's GDP in 2014 and 0.57% of GDP in 2015, averaging around €45 million each year.

The report states that further revenue in indirect taxation equivalent to 0.3% of GDP will be placed on consumer goods and services, and 0.06% of GDP will come from a revision in fees on market output, to compensate for the revenue lost due to the lowering of income tax bands. Last month, the Chamber of Commerce expressed its worry over these indirect tax increases.

"The Malta Chamber interprets this as a potential increase in Excise Duties and other indirect taxes on top of the increases already effected at the last Budget.

"The Malta Chamber's strong concerns are justified given Malta's poor track record in enforcing payment of indirect taxes through fair and effective market surveillance. The compounding effect of Excise Taxes, Eco-Contribution and VAT further adds to the concern of tax abiding operators.

"To this end, the Malta Chamber is opposed to any further increases in consumption taxes until such time that Government puts into place effective structures to ensure a level playing-field for all, besides, a fair share of tax revenue for government and protection for the consumer."