Finance Minister dubs Malta Files 'fake news'

Finance Minister Edward Scicluna has lashed out at a story linking Malta's financial services system to a Russian billionaire's extortion racket, saying allegations that Malta's tax system was under scrutiny are “fake news”.

"The Malta Files story is unfair and endangers the economy and jobs," said the minister.

He dismissed the story about Russian billionaire Oleg Boyko having used Malta to pay 5% tax whilst charging up to 700% interest to clients as a “smoke and mirrors story created to damage the country”.

Speaking on ONE TV's Paper Scan on Sunday morning, Scicluna defended Malta's financial services system, while accusing the international press of ganging up on Malta at a moment when it’s guard was down.

The Malta Files are a leak of 100,000 documents from the Malta Financial Services Authority’s company registry which were published by the EIC.network together with MaltaToday and 12 other international media houses.

The leaks offer a glimpse into how Malta works as a base for tax avoidance inside the EU by welcoming large companies and wealthy private clients who try to dodge taxes in their home countries.

“I went to Paris to speak to the OECD and told them that we are against tax evasion, but I also said that our system is sacrosanct. They changed the law to accommodate the Maltese system,” said Scicluna, on the systems legal standing.

“This is water under the bridge. Whoever is saying that we are under scrutiny ...this is fake news,” he added.

The minister insisted that Maltese authorities had always complied with their foreign counterparts.

“When Russian banks tried to set up in Malta, we kept them at bay and they went to Cyprus,” he said. “When we were informed by Italian authorities that there was a possible link to the mafia in the iGaming sector…we took action.”

Scicluna stressed that while considerable damage has been done to the industry, Malta “had nothing to be ashamed of”, adding that the journalists and media houses behind the leaks did not bother consulting with people who have expertise in the field.

He insisted that forecasts about Malta by international rating agencies remain positive, arguing that that was what ultimately mattered.

“Governments rely on those reports and not what some journalist says, irrespective of the newspaper they write for,” said Scicluna.  

He explained that countries were free to set up their own tax regimes, once again driving home the message that Malta’s “financial regime is legitimate, and approved by the OECD.

“There is a lot to be done to combat companies who shift profits to the detriment of other countries and we will continue to do so,” he said. “We will continue to cooperate with the OECD to avoid profit shifting for the purpose of tax evasion.”