Objections by the Opposition to amendments aimed at plugging tax loopholes were tantamount to condoning evasion, Finance Minister Edward Scicluna said yesterday.

He was referring to the stand adopted by the Opposition during the committee stage of the parliamentary debate on the Budget Measures Implementation Bill.

Prof. Scicluna said legislative loopholes were enabling tax avoidance and the Opposition was “acting irresponsibly and carelessly” by blocking changes to address them.

One of the amendments the Opposition was objecting to dealt with duty paid on cigarettes. Prof. Scicluna said it was intended to address a situation that arose after the Budget for 2014 when prices on certain cheaper cigarettes increased beyond the change in excise duty that had been announced. The difference collected was retained as profit and not fully passed on to the government as tax due.

The amendment was withdrawn “due to its overly complex legality”, he said, adding that the ministry “will address the matter through other channels, in the interest of ensuring a competitive market and to avoid profiteering”.

Another amendment that was opposed addressed a legal loophole affecting excise duty on cement. The law, introduced by the previous administration, laid down that tax was applicable only on a particular type of cement (the Black Portland). This led to a situation whereby other types of cement were being imported without tax being levied or paid.

“In opposing both these amendments, the Opposition is not only defending tax avoidance but is promoting tax evasion by not allowing a now known legal loophole introduced during its own administration to be corrected in favour of a more robust clause, aimed at addressing tax evasion and providing a more equitable tax scenario,” the ministry said.

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