[WATCH] Prime Minister sounds tax evasion warning in meeting with social partners

Prime Minister Robert Abela ask social partners for cooperation to weed out tax dodgers and professionals who assist them during MCESD session on FATF greylisting

Prime Minister Robert Abela addresses the MCESD on Malta's greylisting by the FATF
Prime Minister Robert Abela addresses the MCESD on Malta's greylisting by the FATF

Under-declaration of tax dues was a major reason why Malta was placed on the greylist by the Financial Action Task Force, Robert Abela has told social partners.

The Prime Minister said government will focus its efforts to go after tax cheats and the professionals who facilitate them.

Abela was addressing a special session of the Malta Council for Economic and Social Development on Wednesday in the wake of Malta’s greylisting.

The Prime Minister insisted the government will not introduce new taxes but asked the social partners to cooperate in weeding out tax dodgers.

“Legitimate businesses have nothing to worry about, but we cannot tolerate abusers,” he told the MCESD.

The media was allowed in for the introductory remarks. The meeting continued for almost two hours behind closed doors.

Abela said the government had signed an action plan and commitment with the FATF to address three key areas of weakness identified by the international monitors.

However, Abela would not say what the timeframes for the action plan were when asked by journalists after the meeting.

He insisted the plan was very technical and it was government’s intention to accelerate the timeframes and get back on the whitelist as quickly as possible.

Finance Minister Clyde Caruana has already ruled out October, when the FATF meets again, as the target date for getting off the greylist.

On Joseph Muscat

Asked whether he would publicly distance himself from Joseph Muscat, Abela insisted that his predecessor was no longer in government or in parliament. The Prime Minister added that he would never justify Panama Papers.

Abela told the social partners that government will clamp down on corporate service providers that set up obscure financial structures to help clients avoid tax and launder money.

Another aspect highlighted by FATF was the need to have more accurate information on ultimate beneficial owners and sanctions against professionals entrusted with the responsibility to provide such information.

Abela said Malta had already come a long way in beefing up its register of ultimate beneficial ownership of companies but insisted abusers still exist and government will have to address this.

The Prime Minister warned that to get back onto the FATF whitelist, Maltese authorities were going to need more bite to go with their bark.

He said regulatory authorities had to be given more power and hoped that the Opposition would support proposals to allow authorities to hand out fines that until now can only be imposed by a court of law.

Another issue highlighted by FATF was the type of intelligence gathered by the Financial Intelligence Analysis Unit, especially on criminal tax evasion.

The Prime Minister said the government planned on investing more in the FIAU despite having already increased its budget tremendously.

Opposition leader Bernard Grech is now meeting the social partners.