Intaxxati bil-moħbi

minn Edward Scicluna, Kandidat tal-PL ghall-elezzjonijiet tal-Parlament Ewropew 
  
l-orizzont - It-Tlieta 14 ta' April 2009 
  

Kulħadd jaċċetta li kull Gvern irid jintaxxa biex ikollu x’jonfoq fuq is-servizzi pubbliċi. Però għal kol lox hemm limitu. U dan japplika għat-taxxi wkoll. Mhux l-ewwel darba fl-istorja nisim għu b’rew wixti meta l-pajjiż iħoss li m'għan dux iħallas iżjed milli jmissu. It-tbatija, riżultat tal-piż tat-taxxa, tkun tant kbira li l-pop lu ma jkunx jiflaħ għaliha aktar. 
  
Dan il-gvernijiet jafuh. Biex iżidu d-dħul tagħhom b’mod si ni fikattiv dawn iridu bilfors idaħ ħlu xi taxxa ġdida, jew inkel la jgħollu r-rata ta’ taxxa li teżisti diġà. Hekk pereżempju ġara me ta ddaħħlet it-taxxa tal-VAT, kif ukoll meta din għolietilha r-rata minn 15 għal 18 fil-mija. 
  
U għalhekk il-Gvern jipprova skemi biex dan il-piż jiżdied kemm jista’ jkun mingħajr ma jinduna l-poplu. Irridu ngħidu li l-ekonomija tkejjel dan il-piż bħa la l-proporzjon tad-dħul naz zjonali li jinġabar f’taxxi. Sintendi anke jekk ma jitkejjilx il-piż ħafna drabi jinħass sew. It-taxxi ma jagħmlux il-Gvern popolari u għalhekk f’dan ir-rigward jekk jirnexxielu, huwa jipprova jaħbi idu. 
  
Fil-każ tal-Gvern Malti huwa ċar li hekk qed jiġri. 
  
Nieħdu l-ewwel mod. Kull sena minħabba l-għoli tal-prezzijiet, min iħaddem iżid il-pagi tal-ħaddiema biex dawn ilaħħqu mal-ħajja. Dan id-dħul m'huwiex reali għax fejn konna bqajna. Bi dħul miżjud b’ħamsa fil-mija biex tlaħħaq mal-ħajja li tkun għoliet b’ħamsa fil-mija ma tkun għamilt l-ebda gwadann. 
  
Mhux hekk għall-Gvern. Kontra dak li jsir f’ħafna pajjiżi oħra tal-Unjoni Ewropea, il-Gvern Malti ma jgħollix ’il fuq awtomatikament is-'ceiling' ta’ kull 'income tax bracket'. Għal hekk il-ħaddiem Malti jispiċċa jaqbeż is-'ceiling' u jibda jħallas iżjed taxxa mis-sena ta’ qabel. 
  
Għaliex għandhom ħaddiema jispiċċaw iħallsu iżjed 'income tax' jekk ikunu baqgħu kif kienu s-sena ta’ qabel? Huwa għalhekk li f’ħafna pajjiżi din it-taxxa moħbija mhix permessa u l-'bra ckets' jew 'ceilings' huma awto ma tikament aġġustati kull sena, f’sistema msejħa “index-linked”. 
  
Tant hawn Maltin li ma jafux b’din it-taxxa moħbija li meta kultant dan it-'tax bracket' jiġi rranġat, kulħadd jaħseb li dan hu xi att karitatevoli tal-Gvern li qed jaqta’ t-taxxa. Dan ġara dan l-aħħar. Sew qabel u sew wara l-elezzjoni ta’ sena ilu. Li jkun biss ġara hu li l-Gvern ikun radd lura xi ftit mit-taxxi li jkun ħa hu stess bil-moħbi fis-snin ta’ qabel. 
  
Iżda dan l-aħħar il-Gvern qed juża metodi ġodda kif iżid it-taxxi bil-moħbi jew kif jgħidu bl-Ingliż, “by sleight of hand”. F’ħakka ta’ għajn mingħajr ma tinduna jkun għolla l-piż tat-taxxi. Dan hu permezz taż-żieda ta’ tariffi monopolisitiċi wara t-tneħħija ta’ xi sussidji li kien hemm fuq dak is-servizz. Dan jinkludi iż-żieda fit-tariffa tal-gass fl-ewwel ta’ April, iż-żieda fil-kontijiet tad-dawl u l-ilma mill-ewwel ta’ Ottubru li għadda u ż-żieda mħabbra, iżda mhux attwata s’issa, fis-servizz tad-drenaġġ. X’qiegħed jiġri hawn?
  
Qabel ma nwieġeb din il-mistoqsija importanti rrid inkun ċar biex ma niġix ikkritikat li bħala ekonomista ninstema' li ma nemminx fil-liberalizzaz zjoni tas-swieq. Mhux qed ngħid li ċertu sussidji m’huwiex tajjeb li jitneħħew biex is-servizz jirrifletti kemm jiswielna biex nipproduċuh u biex inqassmuh. Dan japplika għall-gass, id-dawl u l-ilma u d-drenaġġ. 
  
Però din il-politika tas-suq m'għandiex tintuża mill-Gvern biex jgħolli l-piż tat-taxxi minn wara dahar il-poplu. Kif fil-fatt qed jiġri. Ħalli nfiehem aħjar. 
  
Lejlet li għola l-prezz taċ-ċilin dri tal-gass, l-ispejjeż tal-produz zjoni u distribuzzjoni kienu qed jitħallsu minn żewġ sorsi. Parti mill-konsumatur permezz tal-prezz issussidjat u parti mit-taxxi tagħna li kienu qed imorru biex jitħallas is-sussidju li l-Gvern kien jgħaddi lil Enemalta. 
  
X’ġara sew fl-1 ta’ April? Il-konsumatur ġie mitlub iħallas 37% tal-prezz ta’ qabel iżjed biex is-sussidju fuq il-gass jonqos sew. B’hekk jippermetti li l-Gvern ma jibqax iħallas il-'public service obligation' li fil-passat parti minnha kienet tmur għas-sussidju tal-gass. 
  
Mela filwaqt li l-ħaddiem Malti ntalab iżid il-kontribuzzjoni tiegħu permezz tal-prezz, l-istess ħaddiem ma ngħatax lura u lanqas ġie kkumpensat għall-fatt li issa m'għandux bżonn jikkontribwixxi mit-taxxi tiegħu għas-sussidju li issa se jitneħħa jew jonqos. Mela dan il-gwadann jekk ma ħadux min iħallas it-taxxa minn ħadu? Qtajtu sew. Id-differenza żamma l-Gvern Malti. Dan it-'trick' magħmul f’ħakka t’għajn se jippermetti l-Gvern idaħħal aktar taxxi, tant li se jgħolli l-piż tat-taxxa fil-pajjiż. Dan ġara wkoll fil-każ tad-dawl u ilma, fil-każ tal-gass u dalwaqt fil-każ tas-servizzi tad-drenaġġ. 
  
Fir-rapport ta’ stabbilità u konverġenza li l-Gvern Malti għadda lill-Kummissjoni Ewropea f’Diċembru li għadda huwa wiegħed li se jżid il-piż tat-taxxi (b’parti ta’ perċentwal tal-GDP) matul din is-sena li qegħdin fiha. Ħafna skantaw kif dan jista’ jsir. Qalu li żgur din is-sena l-Gvern mhux se jazzarda jdaħħal taxxi ġodda jew jgħolli r-rati ta’ taxxi li jeżistu. Dan veru, iżda bħalma rajna hawn fuq, il-Gvern għandu modi oħra kif jintaxxana iżjed, anke bil-moħbi. U allura l-wegħda tal-Gvern lill-Kummissjoni Ewropea ma kienet żball xejn. 
  
www.edwardscicluna.com 

Could interest rates in the Euro area go any lower?

Last Thursday, the European Central Bank (ECB) cut interest by 0.25 per cent to 1.25 per cent, falling short of analysts’ expectations of another 0.5 per cent rate cut. Business Today spoke to economic analyst – Labour candidate for EP elections and economist Edward Scicluna, about the ECB’s latest decision, the issue of non-standard measures and whether Maltese banks should cut their interest rates after the latest ECB cut, among other things. Report by CHARLOT ZAHRA

Edward Scicluna : “Too little too late”

What is your opinion about the ECB’s decision to cut interest rates at a historic low of 1.25 per cent?

Too little too late. The ECB does what some other Central Banks would have done with a bolder cut a month earlier. The overly conservative attitude of the ECB is now well established.What, do you think, led the ECB to exercise caution with cutting the interest rate this time around despite the worsening of the economic crisis in the euro area, especially the inflation figures? The ECB is more reluctant than the Federal Reserve to start using what it refers to as “non-standard” measures to support the Euro zone economy.The tiny and sparse cuts in the interest rates prove that the ECB wanted to take its time before reaching this unorthodox stage, which every central banker dreads.Resorting to quantitative easing and direct printing of money is not a light decision to take. It is still uncharted waters.

ECB Governor Jean-Claude Trichet reiterated his warning of using “non-standard” measures to support the Euro zone economy, saying that the ECB would be discussing the matter next month. Do think that the time is now ripe for non-standard economic measures or not? Why?

Quantitative easing is the term we use which a Central Bank may use in such an eventuality. It is similar to a tourniquet used in first aid; it may stop the haemorrhage but creates dangerous side effects.The printing of money sends shivers down the spine of any central banker. Can you imagine the European Central Bank getting to that stage in a country like Germany – where hyperinflation is likened to a volcano exploding in the middle of the town? Memories are hard to be forgotten.On the other hand, the downward risks are still there in spite of seeming observations of traces of an economic uplift on the horizon. Economic activity and asset prices are falling at a lesser rate.But one still needs to use all the monetary and fiscal instruments at one’s disposal to stop this dangerous beast. The 1930s devastation happened only 80 years ago.The stages being reached are still very similar. That’s why it is so scary. The G20 meeting has to be seen in this perspective.

Last month, Maltese banks did not pass on the full interest rate cut to clients, claiming that they wanted to protect depositors. In view of the current crisis facing the Maltese economy, do you agree with the banks’ approach? Why?

The fall in the central interest rates have stopped being effective because the banks are no longer responding in sympathy. Today’s banks are upping their rates rather than lowering them.The reason is simple to understand. Interest rates include a risk element. That risk element is increasing and the cautious and correct banks want to reflect it in their lending rates.And that is why soon the Central Banks have to do what the Japanese did in their decade long recession – quantitative easing.

In your view, should they now pass the full interest rate cut to their consumers, especially since the rate cut is smaller?

Governments may use cajoling, suasion and similar methods to get banks to respond to ECB rate changes. But there is a limit to what they can do.

Taxation by stealth

by Prof. Edward Scicluna

The Times of Malta - Wed 8th April 2009 
  

We define a tax burden as the ratio of revenue from taxation to the country's national income as measured by the GDP. This ratio varies over time and from country to country. What is definite about it is that, as the tax burden increases so does the pinch on one's pocket. 
  
Most of the time this tax burden can come about either by increasing a current tax rate, as has been the case with VAT, which was raised from 15 per cent to 18 per cent, or by introducing a brand new tax. The third way of increasing the tax burden, which is the subject of this contribution, is by stealth. Governments the world over have sneaky ways whereby revenues can be increased to such an extent that they push up the tax burden and this without the full knowledge of the taxpayer. 
  
I am not here referring to tax buoyancy. That is the quality of intelligently-designed taxes that can keep their due revenues growing at the same rate that the economy is expanding, if not more. Income tax and VAT fulfil this prerequisite. They can look after themselves and are able to fill the public coffers as the economy's growth manages to surge forward. For many that is understandable and find no objection. But for sneaky ways? 
  
The first sneaky way to increase the tax burden is by avoiding to inflation-proof the country's income tax. Most advanced countries are not allowed to use this form of hidden taxation. We all know that inflation, even if it were compensated by appropriate wage increases, such as with our local Cola arrangement, does nothing to add to our standard of living. So why should we pay income tax on our Cola and additional inflation-related wage and salary increases? Up to now the Maltese government has not put into place a system whereby each year the tax thresholds are increased automatically (index-linked) to account for nominal wage increases that do not add anything to the real take-home pay. 
  
Many tax payers do not perceive the effects of this nominal fiscal drag. The government knows this. So it may prefer to adjust tax brackets manually once every few years. What in effect is simply the restoring of real tax rates to their approximate pre-inflation levels appears to be a benevolent act of the government looking as if it is cutting taxes. Not surprisingly, such changes are usually made right before a general election or after, in fulfilment of a pre-election promise. 
  
The latest weapon to be used by the government to increase the tax burden by stealth is the increase of public monopoly tariffs following the removal of a government subsidy. This has been observed with tariff increases of electricity and water last October, the price hike of gas as of April 1 and the soon-to-be introduced drainage tariff. 
  
Let us be clear about the argument. One could make a good case for the introduction of earmarked tariffs for specific services such as water or drainage facilities to ensure the recovery of their cost. One may also make a similar good case for the removal of subsidies on certain services such as energy, water, gas and other public utilities to reflect their true cost to society. 
  
However, one should not use this change of policy to increase the tax burden by stealth. Let me explain. Take the price hike on gas cylinders. On the eve of the price hike, the production and distribution of gas on the island was paid for in two ways. One was paid directly by the consumer, admittedly at a relatively low price. The other was paid for, indirectly, by the taxpayer who ultimately finances the subsidy paid by the government to Enemalta to keep the price of a gas cylinder lower that the market would demand. 
  
What has changed on April 1? The consumer has been asked to shoulder a price hike, which permits the government to reduce its previous public service obligation subsidising the price of gas. So while the Maltese, with a consumer hat on, has been asked to make a higher contribution, he or she, this time wearing the tax payer hat, has not been compensated for the saving made on the reduced subsidy. The government has pocketed the difference. The same sneaky tax deal has occurred with water and electricity and soon would be applied to drainage services. 
  
If one had any doubt as to how the Maltese government has promised the EU, in its latest stability and convergence report, that the tax burden for Malta was to increase without the introduction of new taxes or the raising of current tax rates, now one knows how this is done. 
  
Prof. Scicluna will be contesting the European Parliament elections on behalf of the Labour Party. 
  
www.edwardscicluna.com