Taxation and Benefits Policy Analysis Directorate
The main purpose of the Taxation and Benefits Policy Analysis Directorate is to provide leadership in matters concerning structural economic matters, both locally and in European fora, with an enhanced focus on tax and benefit policy as well as the estimation of the economic and fiscal impact of proposed budget measures.
The main objective of this Directorate is to monitor and examine the tax system, and propose changes to meet Government policy objectives in the areas of direct and indirect taxation. In addition, the Directorate monitors and examines public expenditure, and proposes changes to meet Government policy objectives through the development of appropriate benchmarks with a view to measure performance. The Directorate also estimates the financial impact of specific budget measures promoting reforms in the period leading to the Budget. The Taxation and Benefits Policy Analysis Directorate also contributes to the Ministerial coordination effort involved in drafting the National Reform Programme (NRP) and monitors such elements of the Country Specific Recommendations under the responsibility of the Ministry for Finance. The Directorate applies quantitative techniques to estimate the impact of specific policy measures e.g. the QUEST model for the purposes of the NRP. In addition, EUROMOD, a tax-benefit model, is used to simulate the distributional impact of budget measures.
Another main objective of this Directorate is to provide input in modelling exercises underpinning the state of the pension system in Malta, in particular through the use of the PROST model. Also, it contributes to drawing Malta’s position on structural economic issues in priority areas in technical working groups under the Economic Policy Committee as well as technical working groups in issues of economic relevance reported to other Ministries, in particular with respect to the reform of social security and labour market developments. The Directorate monitors also, and examines the state of competitiveness of the Maltese economy. The Directorate provides analytical input to other ministries in areas of a horizontal nature, particularly to those with remits in transport, environment, energy and climate change. It also contributes to discussions in the EPC working group on energy and climate change. It also contributes to discussions in the EPC working group on energy and climate change.