Our government has proven to be far from transparent. It refrains from publishing the contracts entered into with the population’s money. Alleged infringements revealed by some of the functioning and as yet unmuzzled watchdogs like the FIAU have been placed at the bottom of the pile by the Attorney General and the police.
Shame on them! As a member of Malta’s legal profession, I salute the Chief Justice and share the views in his speech about the breakdown of the rule of law.
Darkness, absolute darkness, prevails in the corridors of power in Malta. A small gang knows all that is happening, yet we the people do not. Instead we are given snippets of information, highly redacted contracts or false trails. Absolute darkness.
Light is called for. Much light, white light, torchlight, spotlights.
We the citizens of Malta, we the honest taxpayers unable to dodge tax or to take bribes because we have no political power except our vote and participation in public demonstrations, demand full disclosure in all areas of our economic, social, academic, financial and political lives.
How will the Republic of Light come about?
Very simply.
First, all MPs on both sides would resign from Parliament and return to the House immediately in the same proportion of seats but without those MPs who have offshore accounts or are the final beneficiaries of nominee companies whether in Malta or abroad. These are to be replaced by members of the same party.
Then, once in place, this Parliament would enact a series of laws bringing light and public information to all areas, with the following actions:
1. Buyers of Maltese passports to have their name, original citizenship, total global wealth and sources of their wealth made public. The name of the local law firm and accountant or consultant advising each applicant will also be made public. Journalists and the public would then be free to investigate our new fellow citizens. The government’s declaration that naming these people could lead to international danger for Malta only indicates that some applicants are from countries where dual citizenship is not allowed, or they are heads of State or high officials, or they are being pursued for illegalities in their country of origin. The Maltese need to know.
2. All beneficial owners of locally registered nominee companies to be made public and not just stored in a register to exchange with foreign tax collectors. The Maltese have a right to know who uses shadow companies to hide their true identity as they transact business or arrange money flows. The legal or financial service providers who provide nominees for the beneficiary should also be made public.
3. Sweden and Norway are considered among those who pay the highest rate of tax, the countries with the highest GDP but also the happiest countries of this world. They both publish all citizens’ and corporations’ tax returns every year. This allows the proverbial man in the street to look into what their rich neighbour declares and which deductions they benefit from. Malta should immediately adopt this system of publication of tax returns going back five years.
4. All chairpersons, permanent secretaries and heads of boards, watchdogs, public entities, the police, armed forces and civil service departments to resign. They would be immediately reinstated on obtaining a two-thirds majority approval for this one time. They would be guaranteed tenure of office, sufficient funding and independence to ensure that government and private citizens, local and foreign investors, planners and developers are treated alike.
Malta would be the place where crooks would no longer dare to come. Let them go elsewhere
5. Environmental protection of Malta’s skyline and countryside to be strengthened with the Planning Authority’s chairman selected by mutual consent, as above, to ensure that the high-rise invasion is quickly brought to an end.
6. The armed forces and the police to be re-organised under a system of meritocracy and given high-quality training, thus eliminating the suspicion of nepotism. This would reinstate the level of trust that all countries need in their police and armed forces.
7. Co-operation with other countries to uncover all suspected or proven criminals.
8. Control of all holders of residence permits for tax purposes. We must ensure that they regularly and consistently fulfill the obligation of spending more than 183 days of physical residence in Malta required to retain this status. For residents here for tax purposes, change the taxation on remitted revenue to taxation of global revenues at Maltese tax rates and deductions. This way we will see who really comes to live in Malta because they love Malta and its way of life, and those only coming for tax purposes.
9. Ensure that all Maltese taxpayers declare their full income. No deals with different professions by the Commissioner for Inland Revenue should be allowed. Wage earners and State employees whose income is regulated and recorded will feel more comfortable living side by side with their fellow citizens who are self-employed.
10. VAT collection with heavy fines for avoidance.
11. Traffic wardens and traffic police to increase controls through speed cameras and to have zero tolerance for all transgressions however small. We would see an immediate improvement of traffic flows and a happier population. Foreign plated cars breaking the rules to be clamped or towed away.
12. Stop the culture of retro regulating transgressions like building, health and safety, land occupation without title and environmental damage like dumping of waste material. Punitive fines and strict controls are the only way forward in a Rule of Law country.
13. The gambling part of the gaming industry to be dismantled completely. Records of tax declarations of the gaming industry to be made public. Any betting amount above what a normal person can afford to be immediately analysed to avoid money laundering.
14. Malta to become a signatory to the Council of Europe Convention on Transborder Provision of Services.
This is a short list which I am sure persons more expert than I can add to, change or refine.
What is common to them all is Light.
Light is brought where there is darkness and secrecy. Information and transparency become the absolute trademark of such a Republic of Light.
The world of the future is beckoning, the proverbial writing on the wall has now appeared. Why not make Malta the most open, transparent and welcoming low-tax state of the European Union. All honest taxpayers are welcome, no funny refunds of dividends, no VAT returned to owners who pretend to lease their boat, while leasing it to a series of companies of which they are the final beneficial owners thus avoiding VAT.
Malta would be the model for all jurisdictions to follow. Yes, the first five to 10 years would slow down our economy. Passport buyers would certainly be fewer than today and may even dry up completely if exposed. They will try to go to Cyprus and Austria. However, the EU would welcome such a conversion of the Maltese Saul to the Maltese Paul and its move from Darkness to Light.
Its sounds like Utopia. It possibly is just that. I may be branded a dreamer. Yet in my 50-year-long career, I have been known to have rather good, long-term foresight. I see the emergence of ‘The Ethical Corporation’, i.e. a company that pays a minimum of between 25 and 30 per cent of its profits in tax somewhere, anywhere in the world, in order to be allowed to trade within the EU, to be able to find European buyers.
When citizens boycott Amazon, Nike, Apple and many others we can all start to breathe once more the fresh air of an honest world. A world lit up by truth and transparency. Malta would be the place where crooks would no longer dare to come. Let them go elsewhere. They will be hounded slowly but surely even in those BVIs, Panamas, Cook and Cayman Islands, Jersey, Isle of Man, Gibraltar, Guernsey, Cyprus and Ireland.
The world would certainly be a better place. Daphne’s life would not have been in vain.
The gauntlet is cast. Do we, Maltese, have the courage to perform this reinvention of ourselves? If we did, we could change the world.
(This concludes a two-part article started last Sunday)
John Vassallo is former Senior Counsel and Director for EU Affairs at GE, a former Vice President EU Affairs and Associate General Counsel Microsoft, and a former Ambassador of Malta to the EU.