The Malta Independent 22 November 2019, Friday

TMID Editorial: Budget 2020 – How to control a €10,000 capping

Friday, 18 October 2019, 09:38 Last update: about 2 months ago

Judging by the reaction on the social media – this has become a sounding board of people’s emotions and thoughts – the budget measure that garnered most attention was the one giving €300 to every newly-born or adopted child as from 1 January, 2020.

Jokes about opening sperm banks, adopting 500 children and women celebrating with pregnancy kits have abounded on Facebook and elsewhere – all because of this blessed €300 gift. Helpful as it is, it does not change anyone’s life; although it will serve for a handful of nappies.

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Anyway, it’s a goodie that the government dished out – one of the many – in a bid to cloud the people’s judgment on the more important matters that are going wrong in this country, such as the ever-growing nepotism, rule of law shortcomings and the government’s hijacking of institutions which are supposed to serve the people, but do not.

There is however one other measure which has by and large gone unnoticed, and about which there was little, if any, reaction; even from the constituted bodies who have shared with us their thoughts on the budget.

We’re talking about the €10,000 capping for cash transactions for the purchase of property, expensive jewellery, boats, cars and art objects. The Maltese people still rely heavily on cash when paying for items they buy, and when this happens with large amounts of bank notes it could be a symptom of money laundering or tax evasion.

The €10,000 figure is the same as that for the amount of money one is allowed to carry when travelling. We have often come across situations when the Customs Department catches people trying to leave or enter the country with more than €10,000. People caught are allowed to keep the €10,000 but the rest is confiscated, and they are charged in court with breaking the law.

The new measure introduced in the budget is a good idea. It is one sign – perhaps small, but at least there’s a beginning – that the government is showing to tackle abuse. In his budget speech, Finance Minister Edward Scicluna said that this “abuse must be reduced so as to create a more just society and business”.

But, unlike what happens at the airport and ports where Customs Department officers are always present to act on any suspicions, most of the transactions that the minister mentioned are carried out without the presence of a public notary or any other official who has the duty the see that nothing untoward takes place.

When one buys a car, there is no need for a notarial deed. One does not take a notary with him or her to a jewellery shop. So the question is – how will control be exercised on these transactions? What kind of monitoring is the government planning to see that this new regulation is not flouted?

The government needs to come up with very strict guidelines which both the purchaser and the seller must abide by in circumstances like this. But, as often happens in other situations, it’s one thing enacting a law, and it’s another thing enforcing it.

And, in this particular case, it will be next to impossible to make sure that all transactions are within these established parameters.

 

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