Finance Minister Clyde Caruana has sharply criticised the Nationalist Party's proposed tax cuts, arguing that the figures being presented by the Opposition do not make sense, and warning that the measures could severely damage Malta's economy if implemented without a credible financial plan.

Speaking during a press conference alongside Justice Minister Jonathan Attard, Caruana accused the PN of presenting unrealistic economic proposals in an attempt to outbid the government politically, while also making a couple of new proposals of its own.

Attard pledged a future PL government would reduce the stamp duty on the transfer of family businesses from 5% to 1.5% on a permanent basis, saying that the measure as a more sustainable alternative to the PN’s proposal to abolish inheritance taxes entirely.

He also announced new legal provisions intended to provide greater certainty during the succession process.

Attard explained that if one or both parents die while the transfer of a business is still underway, the government would recognise the original commencement date of the process, allowing the transaction to be legally concluded within one year of their passing.

Caruana focused on the PN's proposal for a minimum annual tax relief guarantee of €1,200 for around 300,000 workers.

Caruana said a simple calculation showed that the measure alone would cost approximately €360 million per year.

"Pick up a calculator. Multiply 300,000 workers by €1,200 and you arrive at €360 million. That is the real cost of these tax cuts," he said.

Caruana argued that this contradicted figures previously presented by the PN, which had estimated the financial impact at between €110 million and €130 million annually during the first phase of implementation.

PN Leader Alex Borg had stated that, because the measure would be introduced gradually over two years, "the initial cost will be around €110 million to €130 million per year."

However, Caruana insisted that the Opposition's own explanations showed that the total cost would eventually exceed €400 million annually, more than double the figures that had been publicly quoted so far.

He described the discrepancy as evidence of a lack of seriousness and said people could not place their trust in proposals that, according to him, lacked credibility and financial planning.

The finance minister accused the PN of attempting to "offer the most" without explaining how such measures would be funded sustainably.

"If these proposals are implemented without a serious financial plan, they could cause major harm to the country's economy," Caruana warned.

Meanwhile, Attard said the issue was ultimately one of credibility and responsibility, echoing concerns raised by Caruana over the PN's economic proposals.

"The measures being presented by the Labour Party form part of a responsible and balanced approach towards the economy," Attard said.

He added that the PL's approach "recognises the practical realities faced by businesses" while also looking towards "responsibility, fiscal sustainability and, above all, legal certainty."