There is no doubt that the recent political bickering over allegations and scandals had an impact on voters. Imagine, then, the impact it would have on international companies in Malta. While local companies which have deep roots will have few options except to sigh and carry on, it can have a far more unsettling impact on those who chose to be here and could just as easily leave.
The two political parties have been accusing each other of damaging the financial services industry and the gaming industry, and representatives from both sectors – particularly in private – rightly expressed grave concerns.
However, there were two very distinct issues at play over the past weeks – even though in the heated debates of the electoral campaign, the poison understandably leaked from one to the other. On the one hand was the recent criticism of Malta as a tax haven by the North Rhine-Westphalia finance minister, and the ‘Malta Files’, which claimed that Malta was being used for tax avoidance by firms linked to the Italian mafia, Russian loan sharks and the Turkish elite.
On the other was the local soap opera, with numerous allegations of wrongdoing and corruption, with a colourful script involving midnight strolls around Ta’ Xbiex and rabbit feasts.
During his belligerent performance on Xarabank, Prime Minister Joseph Muscat quoted from a story which had appeared in the Times of Malta online to prove that the latter was not having an impact on the former.
He got some of the details wrong as he referred to a representative from US regulators, whereas it was actually the CEO of Grant Thornton International – but more importantly he took the comments made by Ed Nusbaum out of context.
The CEO, who had only arrived in Malta a day earlier, was asked about the attacks trying to portray Malta as a tax haven. He was also asked whether having an advantageous tax system automatically meant a country was dodgy, and what might have prompted the attacks.
GTI knows full well how advantageous the tax system in Malta is, and when he said that there were bumps in the road for many jurisdictions, he was not referring to Panamagate or the alleged abuse of Pilatus Bank accounts, and he was certainly not exonerating the perpetrators of putting Malta’s reputation at risk.
Malta’s tax system has been attacked repeatedly over the years – and those in the sector immediately recognise that rivals have much to gain from rubbishing their competitors and will not be taken in by it. With Malta’s gaming companies flourishing, the temptation to tarnish the country’s reputation must have been overwhelming.
And with numerous companies posed to decide where to go if they needed to relocate from the UK after Brexit, there is an obvious motive for attacks from those who know that prompting even momentary hesitation about Malta could drive companies into their arms.
Malta’s reputation as a jurisdiction has been built up over years and has always been respected.
When Mr Nusbaum said it was “nine plus” on a scale of one to 10, this is what he was referring to.
But extrapolating that to show that the Panamagate and Pilatus allegations would not have an impact if allowed to fester is ridiculous.