Issue link: https://maltatoday.uberflip.com/i/1528842
maltatoday | SUNDAY • 3 NOVEMBER 2024 4 INTERVIEW Clyde Caruana: 'I want to ensure better tax collection' DESPITE an income tax cut that will cost the government €140 million, eco- nomic growth and improved tax collec- tion will see tax revenue grow by €85 million in 2025, according to Finance Minister Clyde Caruana. In an interview with MaltaToday, Caruana discusses key points from the recent budget, focusing on an income tax cut, corporate tax reform, pension adjustments, and the future of the La- bour Party. The budget's major measure, a €140 million income tax cut, is expected to be offset by a projected €85 million increase in tax revenue next year. It would seem like a paradox but Caru- ana says economic growth and more efficient tax collection efforts will en- sure revenue from income tax will still grow next year, albeit at a slower rate. The Labour Party's 2022 electoral manifesto promised to lower corpo- rate tax, something which is still un- der review Caruana tells me. Before making any changes, he adds, the goverment needs to reach agreements with the European Commission on the implementation of the global min- imum tax rate of 15% affecting around 700 companies. He also stresses the importance of ensuring robust tax compliance before proceeding for- ward with corporate tax cuts. For him, maintaining fiscal stability is a priority. Addressing public concerns over pensions, Caruana clarifies that the retirement age will not increase be- yond 65. Instead, people born in 1976 or later will need to make 42 years of contributions, up from 41, to ensure pension system sustainability amid rising life expectancy. Caruana ex- plains this adjustment aims to keep the pension fund viable without ex- tending the retirement age. Reflecting on Labour's future, Caru- ana acknowledges recent frustrations with his party and has openly advo- cated for introspection and reform. He recalls past challenges faced by Labour and says that, for the party to continue driving positive change, it must remain grounded in its core ideals and instill confidence in the public. Caruana believes Labour can main- tain public trust and effect meaning- ful change, provided it continues to embrace its foundational values and communicates them convincingly. Finance Minister Clyde Caruana has just delivered his third budget of the current legislature, announcing an income tax cut that will be implemented in one fell swoop next year. He sits down with Nicole Meilak to discuss tax collection, pensions and the Labour Party's credibility.