The Maltese expression, “biex taqla’ lira” (to earn a buck) can so easily be applied to many people/families hosting students in order to supplement their income.

Hosting, when carried out within the parameters of the law, is no lucrative business. It is primarily a seasonal activity, done at significant inconvenience to the household, and oftentimes acts as a source of part-time employment (with full-time effort) for one parent in lieu of a job away from the house.

In many cases it allows young families to maintain a middle-class standard of living, in the critical years when the children are growing up and one parent opts to give up employment outside the household.

It is truly amazing how the government has mishandled the issue surrounding the taxation of people (some are not families, by the way) hosting foreign students. Could the government not have put the sector in order without scaring the living daylights out of those involved? Could not the finance ministry deal with this issue in the same ‘tactful’ way that it dealt with the ‘Investment Registration Scheme’, for example?

In a particular letter (24 June) to this newspaper by a certain Mr Carmel Camilleri of Paola, the Green Party has been singled out as a source of scandal. The gentleman is indeed scandalised “that AD should come out in defence of tax avoidance”.

He should first and foremost know that tax avoidance is perfectly legal – what is illegal is tax evasion, a practice Alternattiva Demokratika has, does and always will condemn. The difference is not only semantic, because in his next paragraph, in similar illogical fashion, he first says that AD should be “supporting the government’s efforts to hunt down tax-dodgers”, then in the next sentence he condemns my party by saying that “to add insult to injury, they described the government’s action as a tax hunt”.

Can the man decide whether this is a tax hunt or not? Let me help him decide – it is a tax hunt because government is chasing taxes that are due – there is nothing wrong with that. What we advocated is that the government shows some clemency to these people, who may have been misled.

Clemency has been shown just this year to those evading millions in income tax and other tax-payers not paying up VAT for years; why not these folk? We did not even advocate an extreme position. Unlike the position of the Malta Labour Party, that Mr Camilleri very conveniently does not find scandalous, the Greens did not argue that this commercial activity should not be taxed.

What we said is that for the past, “a flat rate penalty” could be levied “as not to cause an injustice to those other tax payers who may have declared their income in previous years”, while for the future “an optional withholding tax” system is explored. Mr Camilleri can jolly well disagree with our suggestions, what he should not do is misinterpret what we say.

Further down, the gentleman said that “AD blamed the government for the failure of these families to declare the full amount of their earnings”. No, we did not. What we said in our press release is that “the government bears some responsibility for having ignored the problem for so many years”. We recognised that all the parties involved in this mini-saga (i.e. the government, schools and host families) bear some responsibility.

Mr Camilleri is correct in saying that “any employee asks his employer” for an annual statement of earnings, however the obligation to provide it remains, at law, the employer’s. In the case of host families, it is apparent that not all schools provide a statement of earnings.

This does not exonerate the taxpayer, but it does explain the unstructured manner in which the sector is operating. The government so likes to score quick points mentioning the progress within this tourist niche, but then fails for several years to ensure that its operation and tax status is established and monitored. Why does government impose a licence fee of Lm60 if not to have the funds to regulate the sector?

I was attempting to read Mr Camilleri’s contribution with an open mind until I reached the revealing comments made in the last few paragraphs. He understandingly shows an utter disgust with tax amnesties – with very poor consistency though. If he is so annoyed with us asking the government to consider an amnesty, why does he not show at least similar horror at the tax amnesty given by the government (on four occasions now) not to those hosting students, but to those who for decades were evading millions in taxation and taking their money out of the country?

Why is he not so shocked at what government has allowed so many people to get away with for decades, but “flabbergasted” with our suggestion that “some credit must be granted” on the payment of arrears should the government decide to impose them?

The contributor then commented: “what a cheap way to steal votes” – an exposition of his true colour. The Greens have been accused time and time again of stealing another party’s votes – we are used to the diatribe.

When the storm settles, and Mr Camilleri gets his pound of flesh, this country will have to face up to the fact that it has, yet again, built a commercial sector on unsustainable terms. When the government establishes a tax status for the sector, hopefully one that places the burden of tax collection on the schools, it is inevitable that the cost of providing the hosting service will increase.

Unfortunately the income (after expenses, remember) earned from this service is not substantial enough to allow taxpayers to forfeit part of their income without asking the schools for a commensurate increase.

The schools in turn will, most probably, not be in a position to increase their fees substantially and immediately to cover the tax burden.

The government must consult adequately to ensure that a compromise solution, for the future, is found so as not to kill the proverbial goose. If we injure the sector too heavily, there may not be that much income left to tax! Sounds like a lose-lose outcome, does it not?

Edward P. Fenech is spokesperson – Finance, the Economy and Tourism, Alternattiva Demokratika – The Green Party