Issue link: https://maltatoday.uberflip.com/i/1363999
4 maltatoday | WEDNESDAY • 21 APRIL 2021 NEWS KURT SANSONE NO new taxes will be introduced and no tax increases will take place in the foreseeable future, Clyde Caruana has pledged despite a rising deficit. The Finance Minister insisted this af- ternoon that public finances were still sustainable in a reaction to the latest figures released by the National Statis- tics Office. "The biggest mistake now would be to introduce new taxes or increase existing ones. The economy needs support and certainty and the government still has firepower to continue doing so since the debt-to-GDP ratio in the pandem- ic is less than what it was before 2013," Caruana said. He insisted the deficit will be reined in through economic growth and by en- suring that government collects all that is due to it. "Businesses need peace of mind and this is why I am reiterating the commit- ment not to increase or introduce new taxes," Caruana said. Coronavirus led to additional expendi- ture of €5m per day The NSO said public finances reg- istered a deficit of 10.1% last year as government expenditure shot up to cushion the impact of the coronavirus pandemic. The pandemic has resulted in an addi- tional expenditure of €5 million per day, Caruana said, adding the government has revised upwards its deficit forecast for this year to 12%. The revision is a result of the contin- ued pressure caused by the pandemic. The Budget deficit forecast for 2021 stood at 5.9%. The upward revision, he said, was the result of government's commitment to continue financing the wage support scheme until the end of the year and the State aid that will be given to Air Malta if approved by the European Commis- sion. The Finance Minister said the deficit would climb down to 5.6% next year and drop below the Eurozone's 3% threshold in 2024. "We have continued to support the job market, which will ensure that the economy will grow at the fastest pace in the EU next year," he said. Caruana noted that Malta's jobless rate remained among the lowest in the EU. "This does not mean workers have not felt the pinch of receiving less income as a result of the economic situation but the wage support scheme has preserved jobs and this will ensure we are best placed to benefit from a post-COVID recovery," Caruana said. The tourism industry last year saw tourists spend €455 million, a sheer drop from the €2.2 billion they spent in 2019. This is the principle reason for the large economic impact Malta sustained from the pandemic, which reflected itself in public finances, the minister added. NSO figures The NSO figures showed that the defi- cit stood at €1.3 billion last year, a re- versal of the previous year's surplus of more than €50 million. Expenditure in 2020 increased by almost €1 billion, while revenue de- creased by almost €400 million. Government debt shot up to €6.9 bil- lion, or 54.3% of GDP in 2020 and is ex- pected to climb to 65% in 2021. The figures released today are part of the first reporting for 2021 under the Maastricht criteria. "The fiscal results for 2020 were large- ly impacted by the COVID-19 pandem- ic and subsequent government meas- ures to mitigate the economic, social and health risks associated with the pandemic," the NSO said. 'No new or higher taxes,' finance minister pledges as deficit soars on back of pandemic Finance Minister Clyde Caruana says the deficit for this year has been revised upwards to 12% but government will not increase taxes to make good for COVID-19 impact CUSTOMS officials have seized a con- tainer with dummy AK-47 assault rifles en route to Libya. The 900 replica rifles were found in- side a cargo declared as 'crafts', which was physically inspected at Malta Free- port. The AK-47 replicas were of the same shape and approximate weight as the proper weapons and are suspected to be intended as training rifles used for drill, assault courses and weapon possession familiarisation. "Investigations by the Customs De- partment led to the referral of the case to the Sanctions Monitoring Board, and following consultation with the UN Panel of Experts on Libya, the Customs Department, acting in terms of article 6(5) of the National Interest (Enabling Powers) Act, is proceeding with the formal seizure of the said cargo, by the Customs Ordinance, and is to proceed also with its destruction," customs said. Dummy AK-47 assault rifles en route to Libya intercepted by Malta customs Clyde Caruana