The impact of some new forms of fiscal legislation on Malta’s revenue structure

Abstract

" ... the cliche that 'an old tax is a good tax' suggests that a new tax is the converse. Despite this accepted wisdom, we read regularly of more tax reforms in more states. Something, somewhere, must have gone wrong for politicians to find it necessary to introduce changes into a system their instincts tell them to leave alone. That it has been felt, in many states, that all was not well with their tax systems has now been evidenced very widely ... this is undoubtedly an age of tax reform or at least of tax change of a kind one does not usually see." 1 In examining recent international trends in taxation, David W. Williams Professor of Interna tional Business Taxation, University of London, discerns evidence as to a major shift which has occurred in the form of a decreased dependence upon direct taxation, that which taxes income and capital, in favour of a corresponding increased dependence upon indirect taxation, and upon consumption taxation in particular. Two interrelated reasons for this emerge: changes in the economic policy of the countries concerned, taxation being viewed as 'a technique of government' by means of which specific objectives may be attained. the rise over the last 30 years of the value added tax, a multi-stage non-cumulative consumption tax, and of consumption taxation generally, as the primary means of making the direct-indirect shift possible.