[attach id=255617 size="medium"]Malta’s Prime Minister Joseph Muscat looks at his Italian counterpart Enrico Letta during the European Union leaders summit in Brussels yesterday. Photo: Reuters[/attach]
Prime Minister Joseph Muscat yesterday welcomed the EU’s “clearest commitment” to date to address the prices of energy, which he said were a challenge to competitiveness and the lifestyle of citizens.
Speaking at the end of a summit in Brussels that discussed energy and tax evasion, Dr Muscat said he was satisfied that the conclusions of the meeting reflected the Government’s agenda on energy, with a commitment to improve Europe’s energy connectivity, develop renewable sources and ensure that member states are supplied by a healthy energy mix.
He announced the Cabinet had this week agreed on a plan of action for renewable energy, under which sites would be identified to host industrial-scale solar panel installations.
Malta has been keen on strengthening the EU’s resolve to fund links from isolated grids, such as Malta, to the European network. EU funding has already been employed on the €200 million electricity interconnector with Sicily.
We are a place of investment, not a place where you hide your money
However, feasibility studies have also been launched on the possibility of building a gas pipeline, while in the short term the Government plans an LNG terminal.
On the interconnector, Dr Muscat said Sicily had been experiencing capacity problems with its own link to mainland Italy and discussions over the issue were being held with the Italian government.
On tax evasion, the draft conclusions push for greater cooperation on information sharing between tax institutions across countries.
Dr Muscat said this was not an issue for Malta because, as recently recognised by French President François Hollande, Malta was not a tax haven.
“We are a place of investment not a place where you hide your money. We have no problem with increased information sharing because we did away with banking secrecy years ago.
“Moreover, we are compliant with all the relevant sector regulations in the world not just the EU, so we welcome these developments,” Dr Muscat said.
Asked whether the Government also had a plan to tackle tax evasion at a local level, Dr Muscat said he believed in incentives.
As promised in the electoral manifesto, the Government would be reducing the rate of tax on property rental to more realistic levels in order to encourage people to declare this income.
“Right now we have a situation where people do not declare this income because the rate of tax is simply not realistic. If the rate is lowered and this hidden income starts being declared, it’s a win-win situation,” he said.
EU leaders also urged the European Commission to start immediate discussions with a number of third countries, such as Switzerland, Liechtenstein, Andorra and San Marino on a revision of existing agreements that facilitate banks sharing information.
The move is proving quite controversial in Switzerland, who is jealous of its banking secrecy rules that, however, are believed to be responsible for the harbouring of substantial undeclared funds belonging to EU citizens.
The issue of tax evasion has been rising on the priority list of governments, who are struggling to find ways to increase their revenues in the midst of the ongoing economic recession.
It is estimated that the EU loses some one trillion euro to tax evasion each year, roughly double the annual deficit of all member states put together.
A European Parliament resolution on Tuesday called on the EU to halve this figure by 2020 by closing tax loopholes and curbing havens.
mmicallef@timesofmalta.com