Alternattiva Demokratika – the Green Party – expressed its satisfaction that Malta will be adopting the euro as from next year, however it also explained its deep concern on the rationale government has used for introducing a tax amnesty on the economic effects that may arise as a result of this measure.

Chairman Harry Vassallo said: “The Greens are satisfied that Malta has been given the go-ahead from the European Commission to introduce the euro. This is a significant economic development that we have always supported.”

He continued: “We encourage everyone to get prepared for the changeover, and recommend that particular attention is given to vulnerable groups that may be more prone to abuse. We are also offering our political support to the authorities to combat any abuse and illicit speculation – the cheats must be weeded out.”

Dr Vassallo then expressed his party’s concern on the tax amnesty granted recently. He said: “Tax amnesties should be granted in very exceptional circumstances, because otherwise they become an incentive for tax evasion, with taxpayers anticipating the next amnesty. This amnesty is in effect the fourth in as many years.”

He continued: “First we had the Investment Registration Scheme and two subsequent extensions of the same scheme. Now the government is introducing a scheme to register cash and cash assets while paying as little as 4 per cent. Four amnesties in such a short span of time are unjust in regard to those who pay their income tax, as well as those taxpayers who were investigated by the Tax Compliance Unit and had to pay 35 per cent on undeclared income as well as very steep penalties.”

Party spokesman on the Economy Edward Fenech said: “The prime minister has stated that the one of the major reasons for introducing the amnesty is that if he does not, there will then exist the risk of further inflation in the

property market. This is a falsehood. If the government was serious on tax evasion then people with undeclared cash would not risk investing in property since this entails the registration of a contract in the public registry that could come to the notice of the tax authorities.”

He continued: “Conversely it is the amnesty that will allow undeclared cash to be laundered through a government scheme and then legitimately channeled into the property market. It is the amnesty that has created a serious risk of property inflation, not its absence. That government has not realised this is shocking.”

Mr Fenech added: “We cannot refrain from commenting about the fact that this amnesty makes a mockery of institutions like the Tax Compliance Unit and insults honest tax payers. Further, by charging a flat penalty of 4 per cent or 6 per cent, it makes no distinction between those who have small undeclared sums probably accumulated from hard work and those who have hundreds of thousands, likely earned on speculative activities.”

He continued: “Scandalously, by granting anonymity, it makes no distinction as to whether the undeclared cash was earned on legal activities or illegal activities, possibly even from organised crime. There exists a serious risk that the largest beneficiaries of this scheme are drug criminals and usurers known to hold large amounts of cash.”

Dr Vassallo explained the party’s proposals in this regard. He said: “In the first place we believe that the tax amnesty should not be anonymous. Those holding undeclared cash earned from legal activities will not have any problem declaring these cash holdings. It is the criminals who will not disclose their identities. These should not be given an opportunity to clean up their act. Secondly we believe that the penalty of 4 per cent or 6 per cent should be applied only to sums of up to Lm10,000.”

He said that for amounts greater than this, a penalty of 15 per cent should be applied; the same rate applicable to part-time and overtime work. Why should those who have evaded large sums pay less? Finally we are recommending that the windfall tax generated from this scheme, an exceptional amount of around Lm8-10 million, is invested in two ways.”

Dr Vassallo said: “The first was an offer the government should make to buy back the land at Ta’ Cenc from its owners; an area we believe should be developed into a national park similar in manner to that the government is planning for Xaghra l-Hamra. The second investment we are proposing is a fund to kick-start serious reforms in public transport and mobility, an issue that should be a priority in Malta, but is not, due solely to the lack of vision of both government and opposition.”