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Sant says bad idea for EU to insist on tax harmonisation
Sant says tax competition is beneficial for peripheral regions and islands that had limited endowments, such as Malta
23 February 2024, 3:02pm
Matthew Vella
Matthew Vella
2 min read
Former Labour leader and MEP Alfred Sant
Labour MEP Alfred Sant has hit out the European wave of support for tax harmonisation, in an address to the plenary on the future of the European Union Single Market, during the European Parliamentary Week.
The former prime minister said the notion of tax harmonisation within the EU “was a bad idea,” “ineffective,” and “likely to exacerbate tax evasion”.
Sant said tax competition should not be ruled out, because it can be beneficial for peripheral regions and islands that had limited endowments, such as Malta, which attracts taxable multinationals to the island with an 85% rebate on dividends to foreign shareholders.
Over €13 billion paid in tax refunds to foreign shareholders since 2008
“It is imperative to maintain differentiated tax systems in Europe especially when it comes to geographically remote areas. This will enable these territories to compete effectively within the Single European Market. By contrast, tax harmonisation would stimulate the flow of resources from peripheral regions to central areas within the Union, thereby undermining economic and social cohesion,” he argued.
One of the central components of the European Parliamentary Week was the interparliamentary conference on stability, economic coordination and governance in the European Union. The conference brought together MEPs and members of the EU’s national parliaments from across Europe to exchange views on future policy options. It included a plenary discussion about the single market and taxation which was co-chaired by Dita Charanzová, Vice-President of the European Parliament and Marie Lecocq, Vice-Chairwoman of the Committee on Finance and General Affairs of the Brussels Regional Parliament.
The participant panel speakers included Belgian deputy PM Vincent Van Peteghem, who as finance minister serves as president of the Economic and Financial Affairs Council (ECOFIN). The discussion revolved around the Treaty of the Functioning of the European Union (TFEU) and how it produces directives aimed at harmonising laws across Member States, especially in areas impacting the Single Market such as taxation.
Labour MEP Alfred Sant criticised the current ambiguity surrounding concepts like aggressive tax planning and tax avoidance. Their definition had become politically charged, Sant said, emphasising that worries about differentiated tax systems leading to money laundering and tax evasion could best be met by insisting on more transparency in tax policies and procedures.
This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The action was co-financed by the European Union in the frame of the European Parliament's grant programme in the field of communication. The European Parliament was not involved in its preparation and is, in no case, responsible for or bound by the information or opinions expressed in the context of this action. In accordance with applicable law, the authors, interviewed people, publishers or programme broadcasters are solely responsible. The European Parliament can also not be held liable for direct or indirect damage that may result from the implementation of the action.
Matthew Vella, a freelance journalist at MaltaToday, was formerly executive editor at Malt...
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