The Labour Party’s proposal to lower corporate tax by 10% will apply to profits that remain in the company, and any dividends passed on to shareholders will be subject to tax structures, Finance Minister Clyde Caruana said Friday.

The proposed 25% tax – down from 35% – would only be applicable on the first €250,000 of company generated profits, he said.

Addressing the media, he said that when he spoke on Thursday on the €200 million impact of the war in Ukraine, he was referring to the additional price increase for gas and fuel.

He added that Europe is seeking to depend less on gas from Russia, and this is why there is an increase in the price of fuel and gas is expected.

The €200 million that I was referring to on Thursday refers to the additional price increase expected for us to generate electricity and fuel for our country, he said.

Asked about whether the war in Ukraine will affect the proposals of the PL government, Caruana said that this conflict has “long been building up”. He added the PL proposals have taken this into account.

“I have to remark again that the way we are presenting our measures and how much they are going to cost, and when they are going to be introduced has been thought through so that Malta’s economy can continue flowing like it did during the pandemic,” he said.

He added that he has no problem to defend the PL’s electoral manifest and its proposals as the country’s economic wheel is expected to continue to turn in the coming months.

Caruana said that the name of the game for the upcoming months will be on the ability to control inflation, because if Malta manages to do so whilst other countries don’t, it will continue being a completive country.