The role of income taxation in Malta Post 1990

Abstract

The Organisation for Economic Co-operation and Development (OECD) provides a definition formulated after many hours of debate among statisticians and tax specialists. This states, 'the term taxes is confined to compulsory, unrequited payments to general government' (OECD, 1988, p.37). Taxes play a much larger role in the economy than the mere raising of revenue. They make possible the provision of public goods; they can correct the effects of externalities; they help redistribute income; and (controversially) they can be used to manage the level of demand in the economy. This dissertation evaluates the role of the income tax system in the Maltese economy during the period 1990 - 1999. Reference will also be made however to the income tax structure found in the 1980 - 1990 period. This is done to give a complete and clearer picture of the present situation.