One of the most heatedly debated topics at the meeting was the EU commission’s suggestion that corporate tax should be harmonised across the EU. During the meeting Finance Ministry Parliamentary Secretary Tonio Fenech emphasised that Malta opposes this proposal.

“As spokesman of the sector I had been saying for a long time that one of the main problems that Malta could face with EU accession was precisely the harmonisation of corporate tax. I am pleased at the position Mr Fenech took during the meeting.” He said that MLP encourages the government to maintain its position and not fold under pressure from the EU.

Dr Herrera explained that if corporate tax were really harmonised then Malta would not be able to promote itself as a financial services centre by offering special financial incentives.

As an example he mentioned that foreign shareholders currently get a 31 per cent refund on the 35 per cent corporate tax they pay on share related revenues, adding that it is unlikely this incentive would remain if corporate taxes were harmonised.

It seems that MLP’s preoccupation in this sense was founded, he said. “This is why while we embrace the government’s position on the matter we encourage it to not to fold under the pressure.”

Undoubtedly, Dr Herrera said, the country had managed to create a niche in the financial service sector. Such tax harmonisation would disrupt this sector and have a negative effect on the country as a whole. “If the commission’s proposal came to fruition, all the effort the country has been making over the past 20 years will come to nothing.”