During Tuesday’s sitting of the House of Representatives, the Parliamentary Secretary in the Finance Ministry, Tonio Fenech, spoke about the amendments of the various laws found in Bill 87. Such amendments mainly referred to issues of taxation, which were to come into force in 2008.

Mr Fenech said these amendments were being discussed in order to avoid discrimination between different types of entities. For instance, Mr Fenech said, the bill now made a distinction between those entities which were registered in Malta and those which were based in Malta. The amendments were also made taking into consideration European Union legislation and standards.

The opposition spokesperson on financial services, Dr José Herrera, spoke about the main amendments in the bill. He said he was pleased with many of the amendments and with the fact that the means and forms of taxation have been modified to avoid any discrimination or abuse. He also stated that this legislation would now be compliant with European Union standards. Dr Herrera said that certain commercial entities were taxed in a different way than financial entities. He also stated that there was also an attempt at avoiding discrimination between local and foreign beneficiaries.

Dr Herrera asked what would become of those entities which were foreign but not in the European Union, for instance, countries like Dubai and Saudi Arabia. He also argued that Malta must try to encourage investment from everywhere and not solely from European countries. Dr Herrera also referred to the fact that Malta did not have a double taxation agreement with the US in order to attract investment from America.

Dr Herrera agreed that incentives needed to be introduced and offered in order to attract foreign investment.

However, Dr Herrera said, those foreign entities who wished to invest in Malta must have certain guarantees before doing so. He said it was positive that both the Nationalist and Labour Party agreed on this legislation. Dr Herrera also emphasised the importance of having appropriate monitoring bodies in order to avoid abuse and in order for Malta not to become a “tax haven” or, on the other hand, to have lenient legislation which may lead to abuse. Thus, Dr Herrera said, penalties should be included in this legislation, for those people working in this sector, who tried to evade tax or to abuse the system. Moreover, a number of measures already included in the Income Tax Management Act, have also been added in this legislation, in order to avoid abuse

According to Dr Herrera a fact of great concern was that some companies which were benefiting from certain tax subsidies may become more competitive than others because they paid less tax than other entities.

The Deputy Prime Minister and Minister for Justice and Home Affairs, Tonio Borg spoke about some amendments being made with regards to the Local Councils Act. The spokesman for the Labour Party, Chris Cardona also made reference to the local council elections to be held on Saturday. He condemned the arson attacks which were inflicted on a local council candidate’s home in Marsaxlokk.