The Malta Independent 13 December 2018, Thursday

The taxes we pay

Alfred Sant Monday, 3 December 2018, 07:38 Last update: about 10 days ago

One way to assess how big the drag of taxes can be in a country’s economy is by considering the space that they “take”: namely, their volume as a proportion of the Gross Domestic Product (GDP). Then one could compare the result to the outturn in other countries. Statistics published by Eurostat did so for EU countries up to 2017.

That year in Malta, taxes reached 33.4 per cent of GDP – well below the average of the EU as a whole: 40.2 per cent. The country having the lowest percentage was Ireland (23.5), the highest France (48.4).

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No wonder that France has always insisted on the need for some “harmonisation” of taxes within the EU. Meanwhile, Malta is in eight place of those countries that carry the least tax “burdens”.

Eurostat data also show how different revenue sources account by way of these tax percentages of GDP, in terms of: taxes on production and imports; taxes  on the income of individuals and corporation profits; plus net social contributions.

In Malta, the government’s largest revenues come from taxes on individual incomes and corporation profits, which account for 14.1 percent of GDP. In this we come quite close to the outturn of the UK and Italy, which stand at 14.2 and 14.5 respectively,

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Digital taxation

Digital services are located everywhere and nowhere. The big internet companies – Google, Amazon, Facebook and Apple – find themselves in a position from which they can easily manipulate costs and profits. They show profits where it suits them to do so – usually where they get taxed least or not at all. The claims against the manoeuverings of GAFA (as they’re known) have been hanging for quite a while.

Some time ago, the French government came out with the suggestion  that in order to keep control tabs on the GAFA, they should be taxed at 3 per cent of their sales wherever these take place. Personally I think it’s a good idea.

However if it gets implemented, other principles that determine how the EU is managed would be affected. These concern issues over which Malta has claims that it would not be in the national interest to rub off. Among them, a crucial point refers to the need to keep taxation as a sovereign responsibility of member states. But there are also other issues.

Initially distrustful of the idea, the European Commission became a convert and started backing a digital tax. Member states have remained sceptical... Germany included.  

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Bertolucci

I just cannot remember where I first saw it – whether at the San Remo cinema shows organised in Hamrun by Peter Serracino Inglott and Karmenu Mifusd Bonnici, or in one of the small film halls that were scattered around Paris in the 1960s.

“Prima della Revoluzione” was the film that in my mind tied the name of Bernardo Bertolucci to the heights of European cinema.

“Last Tango in Paris” was truly a sensation but hardly more than that. “Il Conformista” was extemely high calibre but yet, it did not stay in one’s remembarance like “Revoluzione” did. I saw it time after time. Not least because there was a fascinating vital link between the film and Stendhal’s novel “The Charterhouse of Parma” – as Bertolucci would take pains to emphasize.

His death some ten days ago, triggered lots of memories. He was an exceptional artist.

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