The Malta Independent 26 May 2019, Sunday

Short-terminism rules

Noel Grima Sunday, 12 May 2019, 09:10 Last update: about 14 days ago

The Nationalists came to my back-garden, so to speak, on Wednesday.

Thirty-two years to the day when they won the 1987 election after the Tal-Barrani clash, the situation, this time round, was absolutely calm.

I listened to a recording on Facebook, while that was possible. The first speaker was Mario de Marco, who spent most of the time allotted to him to demonise Frans Timmermans, the PES (Socialists’) candidate to replace Jean-Claude Juncker.

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At least this time there was no mention of abortion. Timmermans is the ogre to be vanquished because he is committed to bringing in, by majority voting, tax harmonisation.

PN leader Adrian Delia is explaining the party policy in this regard in most of the speeches he is making. Such a proposal undermines Malta’s sovereignty in tax legislation. The Malta tax regime is the mainstay of our tax advantage, without which our financial services can collapse. Hence Malta will have no alternative but to veto any proposed legislation in this sense.

This is also the declared position of the Maltese government and the Labour Party, understandably with some regret it had to be the Socialist candidate to come up with such a proposal. Hence, while the Labour Party has declared its total opposition to tax harmonisation, this subject is hardly being mentioned at all in the election campaign.

I still fail to see how Malta can avoid what’s coming. The coming future of the EU is moving inexorably towards a further concentration with a Single Banking Union well on the way, more power to the European Central Bank and more supervision of budget policies, etc.

Maybe the move towards tax harmonisation will not immediately succeed, although the big country that was completely opposed, the UK, is on its way out. The signs are, however, that tax harmonisation will come, maybe through qualified majority voting.

Malta, regardless of whoever is in power, will have to be very careful and circumspect in how it faces up to whatever will be decided.

Certainly, in my view, the least thing Malta should do is to threaten vetoes. This, in my opinion, is the surest way to push for majority voting, regardless of Malta’s exception in the Treaty of Accession.

And then, let’s face it, an outright opposition is the surest way to remind people across Europe of the many scandals that have surfaced these past years and which portray Malta as little better than a rogue country.

Malta, and other EU Member States, argues that it is within their rights to have a tax regime that is advantageous to those companies that relocate here. But the other Member States argue that the tax saved by companies and individuals who move to favourable jurisdictions is tax taken away from their national coffers. Investigations upon investigations – such as the one reported in this week’s Malta Business Weekly – have stated that tax fraud can amount to €50 billion in a year.

We are not talking here of criminal tax fraud but of legitimate tax planning. In the past, this area was rather cloudy: it is now becoming far clearer. The EU did not shy away from confronting huge companies such as Google or Amazon. Will it be afraid of tiny Malta and its many tax regimes at the service of those who do not want to pay the tax due to their own country?

So our two great parties, otherwise fighting tooth and nail over everything, have come to agree and be one with regard to tax harmonisation. As I said recently with regard to the Gozo tunnel, any time the two parties come to a unanimous agreement is a cause for serious worry.

The financial sector companies and employees who maybe have read the above words with anger and worry, need not worry – the whole world will be crumbling around them. Malta’s companies and financial sector practitioners are built on solid foundations and it will take far more than tax harmonisation to pull them down.

The above is a plea not to let ourselves be dragged down an alley from which there will be no escape.

 

Sympathy with Cami

How much I sympathise with you, Cami Appelgren, for choosing to send your daughter abroad rather than leaving her here to suffer continuous asthma attacks because of the construction work surrounding your house.

One of the reasons we relocated from Mellieħa to Zejtun was precisely the preponderance of demolition and construction work around us which was causing us health problems ever since the demolition started in earnest. When we moved to Zejtun, these health problems disappeared.

We could move (there were other reasons too) and you could move your daughter. But what about those who cannot?

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