Maltese MEPs yesterday voted against the ‘Report on tax rulings and other measures similar in nature or effect’ presented to the European Parliament.

The report received 508 votes in favour, 108 against and 85 abstentions.

Explaining his vote, the head of the PL's delegation, Alfred Sant said tax competition should remain part of the limited array of decision tools available to national economies. He said the report was proposing measures that implicitly or explicitly promoted moves that would introduce tax convergence and harmonisation on an EU-wide basis.

“This goes against the interests of smaller economies of the Union, that lack the endowments of the larger economies,” he said.

Dr Sant had earlier informed the President of the S&D group Gianni Pittella and the S&D co-rapporteur Elisa Ferreira about the vote of the S&D Maltese delegation. 

The former Prime Minister said the flexibility of the smaller EU economies in policy making was already constrained by the convergence in VAT rates, state aid rules, the single currency, the six pack/two pack rules applied to their budgets.

As a result, structural divergences between parts of the Union have grown, not diminished. Reducing the tax flexibility of such economies would further increase these disparities, which was unfair, dysfunctional and unacceptable.

Dr Sant agreed with recommendations regarding an improvement in transparency related to the taxation measures applying in EU member states.

"I fully support measures uniquely designed to promote full transparency in national tax treatments. But the report fails to provide a tight definition of fair tax competition, mainly because it is slanted towards a situation in which tax should be harmonised across the EU. For these reasons, I have voted against the report,” he said.

Nationalist MEPs David Casa, Roberta Metsola, and Therese Comodini Cachia, expressed their strong reservations in another statement.

They underscored that while they firmly believed in tax transparency and the fight against tax fraud, "in our view that does not mean the mandatory introduction of a Common Consolidated Corporate Tax Base (CCCTB).

"The EU is not a homogenous area and not all regions in the EU face the same economic realities, be it for their domestic market size, geographical realities or resources.

"While the report did contain some useful points on transparency, which we supported, we are of the view that questions of tax of the nature of CCCTB must remain an issue of national competence since they reflect the different economies of member states.

"We are convinced that a one-size-fits all approach is not the right way forward for Europe as inevitably it would be the EU's smaller economies, such as Malta, that would bear the disproportionate brunt of such policies."

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