A further €455.8 million of undeclared assets have been registered – an amount described as “surprising” by Finance Minister Edward Scicluna.
“This is a substantial amount, especially when you consider how much was brought in by previous schemes. It seems that more people are now aware of the fact that the chances of getting caught are quite real because of information sharing agreements being pushed by the European Commission and the OECD.
“In Berlin a few months ago, some 50 countries signed multilateral agreements, including tax havens and non-EU members. And there are efforts to get other countries, especially in Africa, to sign up so that there is nowhere left to hide this money,” he told The Sunday Times of Malta.
The fact that so much was declared shows that these schemes are very valid
The amount was declared by 1,469 new registrations through the 2014 Investment Registration Scheme, which expired on November 30, according to the Finance Ministry statement.
Some of this money was being held by people who inherited it from ancestors who had stashed the money overseas decades ago, according to the minister.
“We came across a number of people who told us that they never had any intention of holding undeclared assets and inadvertently found themselves outside the law,” Prof. Scicluna said.
There have been several similar schemes in the past. In 1994, final tax provisions on investment income were introduced designed to ease the tax collection process on investment income and to encourage the repatriation of funds to Malta.
The first ‘amnesty’ was then organised by then finance minister John Dalli in 2001, and brought in €466 million (although the IMF estimates were €680 million), and in 2003, another €300 million (Lm130 million) were registered within less than three months.
This was followed by another scheme in 2005 and yet another in 2007 – the Special Registration Scheme launched in the run-up to the adoption of the euro.
However, these amounts could still be the tip of the iceberg. Well-informed sources said that in the 1990s, estimates based on the economic activity of the time indicated that as much as €7 billion worth of undeclared assets could be overseas.
“The amount is surprising given the amounts that were already declared through previous schemes. We always knew that there was a considerable amount of money overseas which was never declared but the fact that so much was declared shows that these schemes are very valid,” the sources said.
The government wants the money to be declared and registered so that tax can be paid on eligible amounts. Prof. Scicluna estimates that between €3 million and €5 million a year could be collected on the declared amounts.
In this latest scheme the government offered a lower registration rate to those who repatriated the assets – five per cent compared with 7.5 per cent.
Of the total amount registered, only €69.8 million or 15 per cent of the total was repatriated in this latest scheme.
The government received €32 million in registration fees, after netting out the commission payable to registration agents.
The scheme was launched in July to provide individuals and companies resident in Malta with the opportunity to regularise their position in respect of their holdings of eligible assets derived from undeclared income.