A large majority of Maltese firms are smes – small and medium sized enterprises. Actually, they are to be called “micros”, so small they turn out to be. Still, while carrying out transactions, like every other firm, they are subject to VAT. This sometimes places them in a difficult position since they have to incur administrative expenses that proportionately to their size, are quite onerous.
The EU tries to reduce the resulting burdens by exempting small enterprises from having to follow completely the same regulations that apply to the bigger firms. This makes sense.
However, there is a downside. Tax evasion under VAT is still enormous. In some countries, the share of VAT taxes due from smes in the total of VAT revenues is relatively minor. Other countries depend in a major way on the postings of smes for their VAT dues. To exempt smes from all the burdens and reporting obligations under VAT could be a risky approach.
A balance has therefore to be found between the need to ensure that VAT is collected when and as due, and the need to encourage smes in their endeavours.
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Golden visa
I never was an enthusiast of golden visas: those programmes by which governments extend citizenship or permanent residence permits to foreigners who invest in their country. I understand why this attracts criticism.
Even so, in the debate on this subject held last week in a plenary session of the European Parliament I was surprised by the superficiality of the speeches that were made. Many speakers simply claimed that the “golden” schemes were equivalent to state-sponsored efforts intended to allow criminals to launder their money and their identity. No concrete cases were mentioned as to when this had occurred, beyond airy fairy references to “Russian oligarchs”.
One problem that the European Parliament suffers from is that fashions of thought and behaviour prevail which allow everybody – or let’s say many – to feel politically comfortable, while dispensing with any critical faculty. This applies even more when such fashions are believed to be popular with the media and electorates or part of them. As a result, one frequently feels like one has become part of some religious congregation.
There is a lot that can be said about golden visas but not in the way that this was done last week in Strasbourg.
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Democratic Europe
The comment made by European Commissioner Oettinger in the sense that financial markets will teach the Italian people what their vote really means... in other words, how to vote “well”, was shocking. It raises fundamental dilemmas about European democracy today.
Whether you agree or not with the Cinque Stelle and the Lega, the two parties won their popular majority in democratic elections.
If the rule has now become that even when people vote to choose policies, national parties cannot contest decisions taken by the EU but must accept commands transmitted by financial markets, then democracy would have lost all its meaning. Why should citizens bother to vote if at the end of the day, occult financial interests will determine the extent to which European peoples can vote for change?