Maltese MEPs don’t want new tax committee ‘wasting resources’ on Malta’s tax system

MEPs have set up a new committee to investigate tax avoidance practices across the EU: Malta could be a target

David Casa (standing, left) and Roberta Metsola (standing, third from left) have differing opinions on the role of TAX3 from MEPs like Sven Giegold (seated, right)
David Casa (standing, left) and Roberta Metsola (standing, third from left) have differing opinions on the role of TAX3 from MEPs like Sven Giegold (seated, right)

The Nationalist Party’s MEPs have said a new European Parliament committee that will investigate tax avoidance, not to “waste resources” on Malta’s tax system.

The three MEPs, David Casa, Roberta Metsola and Francis Zammit Dimech, said the new committee should not waste time on member states’ tax system and instead focus on crime and prevention of abuse.

“We will never allow the European Union to decide on behalf of the Maltese people on how to run our tax systems. That was, still is, and must remain, the competence of the respective governments. This committee should focus its efforts on the murder of Slovakian journalist Jan Kuciak, who like Daphne Caruana Galizia, was executed as he investigated financial crimes,” the MEPs said.

The MEPs reflected the national consensus among lawmakers that tax systems should remain a sovereign competence of member states. Malta has a generous system of tax rebates for foreign shareholders that can reduce effective tax rates on profits to something like 5%.

Labour MEP Alfred Sant warned that a common European taxation system would remove perihpheral member states' ability to remain competitive within the common market and outside. "I agree that tax competition should be fair, but a common system of taxation undermines national sovereignty."

Labour MEP Miriam Dalli said Maltese MEPs had a duty to the new ‘TAX 3’ committee on financial crimes, tax evasion and avoidance, would not be used as a political football or to attack Malta's tax system. "There are many countries pushing for tax harmonisation... as an MEP I have worked against this because such an action does not consider Malta's size as a small economy."

The new committee was set up after the PANA committee investigating the Panama Papers scandal found a number of illegalities committed by politicians evading tax and laundering of monies.

The plenary adopted the 45-member committee with a broad majority, with a vote on the membership of the committee due to take place in the March plenary session.

“If the Maltese Prime Minister had sacked Konrad Mizzi and Keith Schembri, Malta would not have remained under scrutiny during the past months,” the Nationalist MEPs said.

“Now that the committee has been established for a term of one year, PN MEPs will be doing everything they can to ensure that no harm is done to Malta’s interests and instead focuses on financial crimes, corruption and abuse of power.

“Our interests are the jobs of thousands of Maltese in the financial services sector and the gaming, as well as thousands of other people who depend on these sectors by means of accommodation, entertainment among other things.”

The committee’s establishment was welcomed by another former PANA committee member, the Green MEP Sven Giegold.

“We will put the recent money laundering scandals in Denmark, Estonia and Latvia at the top of the agenda. Danske Bank, the Latvian ABLV and the national anti-money laundering authorities have to explain to Parliament their recent failure to prevent money laundering. The European Commission, the ECB and the European Banking Authority must explain what they will do to prevent such scandals from happening again. We will also demand full access to all documents relating to the screening of third countries for the EU’s blacklist of tax havens. The credibility of the blacklist has to be restored,” Giegold said.

“We need to finish the work we have started on delivering tax justice across the EU. When the Panama Papers scandal broke, the European Parliament took swift action. We produced a strong set of recommendations that could help bring an end to the seemingly unending series of tax scandals that have hit Europe in recent years. Through this new committee, we can help make sure these policies are implemented by the European Commission and the Member States. Only then can all citizens know that everyone is paying their fair share, with no exceptions for the super-rich or big corporations.”

Giegold also said the special committee should pick the work of slain journalist Ján Kuciak, who was also investigating the Panama Papers, connections with the Italian mafia and Slovak politics. “We demand the European Parliament to send an ad hoc mission to Slovakia immediately. As in Malta the murder of journalists may not be accepted.”