To vat or not to vat

The Malta Independent

To VAT or not to VAT

Always in search for any excuse to create a diversion from being held accountable for its performance,` government friendly media are trying to revive the VAT or non-VAT policy of the Labour Party.

Somehow I am depicted as leading an internal crusade within Labour to engineer a u-turn in its anti-VAT policy and make Labour drop its objections to this method of indirect taxation. This gives me more credit than I deserve.

Whilst having a nasty habit of expressing my views quite freely I do not lead crusades to shape Labour`s policies. This task belongs to others more at the core of the organisation. But I never shied away from expressing my views that Labour should not have any strategic objection to VAT which is just another form of indirect taxation as the customs duties it replaced and the CET/ETS which tried to replace it.

Whilst any tax system has its strong and weak points what this country really needs is stability in its tax collecting systems. With VAT 2 having been in place for some 5 years when Labour will next have to decide about it, replacing it again will prove far more cumbersome and harmful than it was with VAT 1 which had been in place for only 21 months when Labour was elected to remove it. It will be far too-deep rooted the next time round.

Applying time and energy to replace one indirect tax system with another is just too wasteful and inopportune. VAT is reality and there should no further argument about its retention or replacement.` Only about its fine tuning to use it as an effective fiscal policy tool for effective economic management.

There are far too many problems awaiting a solution for Labour to keep among its priorities the replacement of VAT with any other indirect taxation system.` There is the problem that this country is frozen in lethargy and nothing seems to be happening.

Except that government seems to be making headway in the privatisation of Public Lotto. A request for proposals was issued on 15th May and it closes on the 13th August. But unless you have Lm7500 to risk throwing away you cannot get hold of the detailed document.

Unbelievable, but` this obscene way of keeping interest down to a selected few who can afford such luxuries has met nobody`s disfavour. The small investor who was eagerly awaiting such privatisation to lift the local stock market from the sullenness it has fallen into is being left completely in the dark about the privatisation of one of the few jewels left in the crown.

Or is the small investors only expected to participate in interest free privatisation bonds to obtain priority allocation in equity issues where such priority is not needed (as such equities are freely traded on the market) ` Why are` investment funds licensed to collect investments to participate in privatisation and then get completely blocked out of the bidding. When it comes to` Lotto floatation,` the private investors not only get no priority . They do not even get a chance to apply.

Only the big boys who can afford Lm7500 to procure an RFP will have a chance to puts their bids on the Public Lotto. The common people are expected to argue about VAT or non-VAT.