The Maltese government is to commission a study on the impact on the Maltese economy of the Anti-Tax Avoidance Package proposed by the European Commission last week, Finance Minister Edward Scicluna told Parliament this evening.

He regretted that the Commission had itself not carried out an impact assessment.

Some of the proposals could be accepted, he said, but one needed to see flexibility in some other measures. Some proposals  went beyond what was needed to tackle tax avoidance. However it was too early to adopt a position.  

Talks were being held with the European Commission and the government would safeguard Malta's interests as long as they did not involve a change of Malta's tax regime, approved years ago by the Taxation Code of Conduct Group.

Furthermore, taxation policies should remain within the competence of the member states and EU decisions should be by unanimity. This, Prof Scicluna said, was a red line for Malta.

Malta was against tax evasion and would cooperate on transparency and exchange of tax information but it would resist any moves for harmonisation of tax rates or the full imputation system.

Shadow minister Mario de Marco.

The shadow minister for finance, Mario de Marco said the Opposition agreed that tax harmonisation should be resisted, national sovereignty on taxation matters should be maintained and it would be unacceptable for the European Commission to object to Malta's tax regime after it was approved by the Taxation Code of Conduct Group.

He asked if the government would use its veto. Malta should be firm and vociferous in resisting harmonisation, he said. 

Malta was against tax evasion but there was nothing wrong with tax planning, he insisted. 

He also suggested that the opposition should form part of the government's financial services task force on taxation, when they had shown that they agreed on policy.

Claudio Grech, shadow minister for economic affairs also insisted that sovereignty on tax matters should not be given up. He asked if the government had started its impact assessment and also whether planning was being made in case some aspects of the EU package was introduced.

Financial services were an important element of the economy. How was the government planning to diversify the economy and how would new investment be attracted to financial services?  

The opposition was for square with the government on defending Malta's interests on taxation but the government should prepare for any possible impact from the EU proposal.

Prof Scicluna said this unity in the House reinforced the position being taken by Malta before the Commission. 

Malta, he said, could continue to do everything possible to stop tax avoidance. It was unacceptable that multinationals ended up not paying tax anywhere. But Malta had nothing to be ashamed of with regard to its system.

The veto, he said, could be used at the right moment, but just threatening was effective. Indeed, the Commission had already changed its position. Malta would seek measures against evasion which did not impinge on sovereignty. 

On the financial services task force, Prof Scicluna said it should hold its regular technical meetings without the minister or the shadow minister, although they could be invited for particular meetings. 

On the impact assessment, Prof Scicluna said now that the package had been revealed, this was the proper time to carry out a full impact assessment.

The government, he said, had no Plan B for a new tax system since the current tax system had already been approved by the Commission and the government would stand by it and defend it fiercely.

http://europa.eu/rapid/press-release_IP-16-159_en.htm