The government will allocate more resources to regulatory institutions in the wake of the Pana Committee’s report issued today, Prime Minister Joseph Muscat told parliament this evening.
Replying to a series of questions by Opposition leader Adrian Delia, Dr Muscat welcomed several parts of the report but said he disagreed with others.
He noted, in particular, that the committee had confirmed that the Maltese tax system was competitive, and in conformity with the rules of the European Union and the OECD.
“The current tax system was drawn up in line with EU requirements when Malta joined the EU, and has not changed since.
“Malta strongly objects to being called a tax haven. Malta is not a tax haven or a tax paradise. There used to be an offshore centre in Malta but that was dismantled before Malta joined the EU. Banking secrecy was also dismantled. Instead, Malta has a system that is very similar to competing jurisdictions in the EU such as Ireland, Luxembourg and The Netherlands as well as Cyprus and the Baltic states,” Dr Muscat said.
He said he agreed with remarks by his predecessor Lawrence Gonzi that comments currently being made about Malta abroad could be the fruit of jealousy by a few who did not like the success being achieved by Malta’s financial services centre.
Opposition leader Adrian Delia said the Opposition not only defended but also promoted the Maltese financial services sector.
Malta had good laws, but the Pana Committee report said that Malta’s institutions in charge of implementing and enforcing tax and fraud rules ‘are highly politicised.’ What would the government do for these institutions not to remain highly politicised?
Dr Muscat said there were several ways how one could not at this Pana Committee comment. Perhaps these institutions were filled with ‘political’ persons by the previous administration. This government had not moved anyone.
More seriously, he said, the government was seeking to better resource the institutions, financially and in manpower. Some 100 persons, specialised in various fields, had been engaged by the MFSA.
Dr Delia said the issue was not whether the ‘political’ persons were Nationalist or Labour but whether they could do their job. The Pana Committee’s observation was troubling.
Furthermore, Pana had also said that the police in charge of prosecutions after FIAU investigations were not equipped to carry out their task, possibly resulting in ‘maladministration’. This was serious, especially in the current context. What would the government do?
Dr Muscat said the government would look deeply into findings about a low number of prosecutions in Malta.
One reason, he said, may be related to the way the institutions functioned. In the case of the FIAU, when there was the least suspicion, a report was filed to the police. The police had different terms of reference and did not prosecute unless there were reasonable grounds that a conviction would be achieved.
The government would invest more in the police. He himself knew of an inquiry report by three judges that mentioned a member of the House and he wondered what had happened to it.
Dr Delia and Nationalist MP Jason Azzopardi also asked what had become of investigations from data leaked in the so-called ‘Swiss leaks’.
Dr Muscat said the investigations were in an advanced stage and names would be published on completion.
Malta had already recovered funds as a result of the investigations.