Sant abstains in tax disclosure EP vote, argues tax flexibility required for economic activity

'EU member states with limited endowments must rely on tax flexibility to promote economic activity' - Alfred Sant

MEP Alfred Sant
MEP Alfred Sant

Member of European Parliament Alfred Sant abstained from a vote on a proposal for a directive on disclosure of income tax information by certain undertakings and branches, holding that member states with limited endowments must rely on tax flexibility to promote economic activity.

This, he added, was, especially the case if the country is located at the periphery of the continent.

“I abstained on this motion because it has the effect of promoting EU common policies in favour of  tax harmonisation. Declarations made repeatedly during its preparation confirm that this is one of the intentions behind it, going beyond the need - with which I agree - to curb tax abuses and money laundering,” Sant said, addressing the European Parliament.

Sant said that different member states of the European Union have different endowments, while being subject to common rules regarding tariffs, excise duties, VAT, competition policies, as well as strict budgetary management of debt and deficits in the case of Eurozone countries.

“The fact that they must balance their books under Eurozone rules ensures that their tax and spending regimes operate competitively under similar conditions to those of their fellow members,” he said.

Sant added that the low limits proposed for company turnover discriminate against the smaller economies.

He argued that due to the country’s size, the turnover produced by companies would be relatively low, and this would soon spill over into cross-border trade, making smaller states liable to proposed reporting rules.

This phenomenon would take longer to manifest itself in the bigger economies, Sant said.

The proposal was approved with 534 votes in favour, 98 against and 62 abstentions.