University of Malta. Faculty of Economics, Management and Accountancy
Abstract
Successive government economic documents in Malta over the past twenty years consider the role of the local tax structure in terms of its contribution to stimulate personal initiative and encourage production, and to generate sufficient revenue for the State to finance at least the annual current expenditure. Yet, it is becoming common to read that local production is overburdened with taxation and regulations. If this claim is correct it means that the tax policies currently implemented are defeating the Government's own set objectives. In this paper we comment on the theoretical relationships that exist between the tax structure and the two policy goals indicated and we assess the validity of the proposition that Malta is an overtaxed economy. No reference is made to non-tax factors, which are considered harmful for economic development.peer-reviewe
