Vouchers and taxes

Labour governments have a way of trying to make people feel good with money gifts.

It started with the annual cheques ranging from €40 to €68, depending on one’s income. Over 200,000 workers received the payment in the form of a tax rebate, based on the tax declaration of the year before. The lower the person’s income, the higher the rebate.

It continued with the one-time cheque of between €15 and €35 which was given earlier this year to make up for the increase in the price of bread and milk. The lower amount was for single-person households, the other for the families of two or more. We all remember that the 153 free telephone service crashed when some people did not receive their due within a day or two, and thought they had been left out.

It is now happening again with the so-called vouchers people aged 16 and over will be receiving over the next few days. These vouchers, totalling €100, need to be spent in restaurants, hotels and retail outlets which were closed during the pandemic. Again, we expect a similar rush to call 153 if a few days pass and some people do not receive their vouchers.

These occurrences are a typical socialist way of appeasing the people and they can also be labelled as populist measures. Of course, everyone will be happy to receive this gift. At a time when many people working in the private sector either lost their job or suffered a wage cut, any extra income is welcome even though, in this case, the money cannot be used as anyone pleases.

The intention behind the move is good too, because it is aimed to encourage people to go out and resume their normal life while at the same time spending some money (via the vouchers) to help businesses regain some of what they lost when restrictive measures were in place because of the Coronavirus pandemic.

The idea that vouchers can be passed on to others is also positive; what is not is that they are to be used by the end of September. It would have been better to extend the period at least till the end of the year, to also cover the Christmas festivities.

When he announced the vouchers scheme last Monday, Prime Minister Robert Abela was asked whether this and other measures the government is introducing to aid businesses will mean that we should expect some form of taxation when the budget for 2021 is put forward in October.

The question was based on what Finance Minister Edward Scicluna had said a few days ago when he was referring to the loan that the European Union will be giving countries to assist them to recover from the economic crisis that was brought about by the virus. Scicluna described it as a prickly pear, which was tantamount to saying that the fruit is good but you have to hurt yourself to get to it. Loans, as we all know, have to be repaid.

To the question, Abela replied in no small terms that there will be no taxes announced, and we will hold him to his word on this.