The registration scheme of eligible assets was necessary and important for the economy of the country, Parliamentary Secretary in the Office of the Prime Minister Tony Abela said in Parliament on Tuesday.

Speaking on the Special Registration Scheme as part of the debate on amendments to the Income Tax Act, Dr Abela said that the scheme is an opportunity for eligible people to “get their house in order.” The penalty imposed is not an insurmountable penalty. A one-time fee of four per cent is to be payable on the registered amount. In the first year of registering the assets, there will be no interest.

The scheme is not intended only for the “fat cats” but also for those persons who forgot to declare their income and who have in consecutive years built up a high capital, Dr Abela said. The scheme has been widened to include securities denominated in Maltese lira and euro that have a primary listing on the Malta Stock Exchange.

Opposition spokesman for tourism Evarist Bartolo noted that there cannot be a focus on the wealthy section of society only. According to a report issued about the level of poverty in Malta, it was established that 15 per cent of the Maltese population live below the poverty line. One out of every five children live in a state of poverty.

Focusing his attention on the Tax Compliance Unit, Mr Bartolo said that it is important that there is an entity that investigates any abuses but it is to be ensured that the investigation that is carried out does not become persecution. The investigation carried out has to be done in a just and transparent manner.

According to a recent seminar on property, Mr Bartolo said that 10,000 apartments are being built every year. Out of these apartments, less than one-third are being sold. Needless to say, a smaller number of apartments are being habitually resided in. Mr Bartolo then quoted from a study carried out by the World Economic Forum showing that Malta ranked 109 from 124 countries in terms of competitiveness in prices.

In his winding up speech to the debate, Parliamentary Secretary Tonio Fenech addressed certain issues that cropped up during the debate. How did all the undeclared money end up in the hands of the people? The reason is that although there were business opportunities, such opportunities were not taken up. The scheme is intended to cover the income obtained from legitimate economic activities. The undeclared assets are only illegal in the sense that the person holding such assets evaded paying the relevant tax due.

It may be that persons who have always paid their taxes feel discriminated against. However it is in the government’s responsibility to ensure that such a scheme works out properly as failure of such a scheme can have serious repercussions. Mr Fenech said that had the government turned a blind eye and not introduced such a scheme, people would have exchanged their undeclared money with other people and the probability that counterfeit euros would be circulated, would have been increased. The person who would suffer in such a hypothetical situation is the vulnerable person who for instance would not know how to identify the counterfeit money.

The bill was then given a second reading.