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Ministry denies tax changes by stealth

The Inland Revenue Department can get full access to data on the investment income of any taxpayer from banks and investment service providers.

The Inland Revenue Department can get full access to data on the investment income of any taxpayer from banks and investment service providers.

The Finance Ministry has denied that changes to the final withholding tax system were done by stealth, insisting they had been introduced in 2008.

The ministry was reacting to an article that appeared in the Times of Malta on Tuesday about changes to the provisions that give banks and investment service providers no option but to disclose the identity of the investors who are subjected to final withholding tax deductions.

The changes empower the Inland Revenue Department to get full access to data on the investment income of any taxpayer from banks and the providers of investment services.

From next year, the current legal requirement for banks and investment service providers to pass on information to the tax authorities on investment income for which tax was not deducted at source will be extended to investment income taxed at source.

The Finance Ministry said that the tax authorities had an obligation to ensure that all of the tax withheld by banks and investment service providers was passed on to them.

The implementation of the changes, the ministry added, had been discussed with financial operators.

Malta, it said, could maintain and enhance its international reputation in the area of combating tax evasion and money laundering through effective actions, as delineated in its AML and action plan.

Such changes, the ministry continued, were not done by stealth and were the result of directives and commitments the ministry had been discussing and working on at various levels, both in Brussels and Valletta.

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