The introduction of death and donation duties and income tax within a historico-legal context

Abstract

This thesis focuses on the most important Acts that introduced direct taxation in Maltese legislation in the first half of the twentieth century, mainly being the Succession and Donation Duties Act of 1918 and the Income Tax which came into force in 1949. Today, these two forms of taxation are an essential source of Government revenue. However, when they were brought into effect, they were subject to a substantial amount of criticism due to different factors that will be explored in the thesis. The introduction of direct taxation was a revolutionary change to the traditional forms of taxation that existed in the first century of British rule in Malta, as well as forms of taxation that had ever existed on the Island with a few exceptions of laws that had been introduced for a limited period of time. Therefore, one must necessarily keep in mind in which context such laws were introduced such as: the economical situation of the country; foreign relations and political ideologies; the relationship with the Colonial Government; the opinions of the political class, higher classes and the working class; and everything that could give light to the intentions and motivations of the revolutionaries and the conservatives. The thesis can be split into three main parts. The first and second chapters focus on the build up towards the introduction of Death Duties. The third chapter delves more into the legal and substantive matters that characterized the Act itself, including criticisms of experts that were in charge of repealing and replacing the law in the 1970s, and the failure for such law to solve social and economical problems that needed urgent repair partly due to the First World War. The fourth chapter explores, inter alia: the nature of Income Tax law and the political tensions that were present during its introduction; as well as the heavy amendments to the Succession and Donation Duties. Finally, the conclusion features general reflections on the cause and effect of direct taxation in Malta on a political and social level, and from a modern twenty first century perspective.