Parliamentary secretary in the Finance Ministry Tonio Fenech said yesterday that the currency and bank deposits registration scheme was the last chance for individuals to come forward and declare any “undeclared” assets or cash without retrospective action from the government.

Mr Fenech was taking part in a discussion organised by the Malta Chamber of Small and Medium Enterprises (GRTU) on the scheme that came into effect on 23 April and ends on 21 July.

Sandro Chetcuti, construction industry section president within the GRTU, said that the scheme was a golden opportunity – and the last chance – for people to declare money that was “hidden”.

He said that the GRTU had been trying to persuade the government to introduce such a scheme for the past two years.

“I strongly urge people to make the most of this scheme, thus avoiding any future investigations by the government – there is no need to be afraid,” he said.

Mr Chetcuti added that the GRTU would continue working for the government to lower income tax.

However, Mr Fenech explained that the rate of income tax could only be reduced when everyone paid their dues. He said the currency and bank deposits registration scheme was not something that the government really wanted to do.

“It is everyone’s duty to pay their taxes. However, certain circumstances led the government to introduce this scheme,” said Mr Fenech.

One of the reasons why it was introduced was the euro changeover that would take place next year, he explained.

Mr Fenech said there was a substantial amount of cash that was kept hidden. “It does not mean that this arose from illegal activities. Some elderly people, for example, prefer to keep cash at home instead of depositing it at the bank,” he said.

“The scope of the scheme is to legalise money that has not been declared,” he said.

However, Mr Fenech made it clear that the scheme would not be used for money laundering and had not been set up for money that was derived from illegal activities.

The government was aware that this money would have to be changed with the introduction of the euro, he added.

“To prevent discovery, they will change their money to euros without going to the banks and at the risk of being given counterfeit notes – something that is very risky for the economy,” said Mr Fenech.

Furthermore, he said, it was very difficult to spot counterfeit euro notes.

“People also try to use the money to buy property, thus creating artificial inflation in the property sector in Malta,” he said.

However, said Mr Fenech, the scheme was the last chance and the government had created enough opportunities for people to come forward and declare what they had.

The parliamentary secretary pointed out that even Labour’s finance spokesman Charles Mangion had said in parliament on Monday that there was no further need for these schemes.

Rene Saliba, an official from the Central Bank of Malta, explained that the scheme was open to individuals who resided in Malta, and not companies.

The assets that were eligible under the scheme were Maltese lira and euro notes and deposits in Maltese lira and euro with local banks, as well as

securities, titles and bonds, he said.

The individual must go to a registered agent appointed by the Central Bank of Malta. These include local banks, stockbrokers, exchange bureaux and other financial intermediaries that are authorised under Category 2 and 3 by the Malta Financial Services Authority, Mr Saliba added.

He explained that notes would be deposited at the local banks in a special term deposit account for a period of one year without any interest.

In the case of bonds or deposits, the individual must take evidence proving that the assets were in his possession on 16 April, said Mr Saliba.

“There is no need for the bonds to be sold before they are registered,” he said.

During the registration process, the individual will be asked to sign a declaration stating that the money and assets do not come from illegal activities, money-laundering activities or any other crime that breaches the Income Tax Act.

Furthermore, the scheme does not exempt the person from complying with the requirements of the Prevention of Money Laundering Act and other regulations.

Registration of Maltese lira and euro currency notes will be carried out against a one-off fee of four per cent of the registered amount, while registration of deposits will carry a fee of six per cent.

Mr Saliba explained that the applicant would be exempt from any retrospective action by the government for not paying income tax on the assets or cash.

The individual would be given a certificate stating that the money had been declared, he added. The Central Bank and the financial agent would also each have one copy.