A Labour Party in government pledges to widen the tax bands to leave €66 million in people’s pockets, Prime Minister Robert Abela said.

This will be the largest ever widening of the tax bands, which will hit mostly people with low and medium income, Abela said in a press conference at the Rialto Theatre.

Giving an example, Abela said that parents will not be paying tax on the first €12,000 earned during a year, €1,000 per month.

A similar widening of the tax bands will also affect workers and self-employed people who file their income tax returns as single or married.

A Labour government will also be giving out “more generous” income tax refunds, which will come in the form of a yearly cheque.

Every person will be benefiting from between €255 and €365 a year in income tax reductions and refunds, Abela said. 

Abela also said that the corporate tax for companies will be brought down from 35% to 25% for the first €250,000 profits. With this proposal he said that companies will have a breath of fresh air as they will have more funds to invest in their products and services.

Explaining how the proposed tax bands will be implemented, Minister for Finance and Employment Clyde Caruana, said that parents’ income tax threshold will gradually increase to €12,200 from the current €10,500, the threshhold for single parents will increase to €10,500 from the current €9,100, whilst married couples’ threshold will increase to €14,400 from €12,700.

He said that with the new tax band proposal, families will be "save" a minimum of €255 more in income tax.

Minister for the Economy and Industry Silvio Schembri, said that a Labour government has always taken decisions with workers in mind. He said that in adjusting for the economy to regain its rhythm, the government is supporting companies with the decrease in corporate tax that will enable them to save money.

Giving some examples, Schembri said that a small hotel employing 20 people on a full-time basis, with a yearly profit of around €250,000 would be saving around €25,000 in corporate tax. He added that the money saved would be enough to cover the basic pay of two employees within the same company.

 

In another example Schembri explained how a manufacturing company having 10 employees on a full-time basis with a yearly profit of €150,000, it would save up to €15,000 in corporate tax yearly.