I am always amazed at the way that the Times of Malta rushes into a topic without any lateral thinking, or deep analysis, whatever.

The report, alleging that government is introducing final withholding tax changes “by stealth” (May 15) clearly shows a failure to see that, only last year, the European Parliament passed a directive requiring changes in the reporting of tax and financial data in EU countries.

This newspaper should know that implementing EU directives does not take place overnight and, so, Malta is now implementing such changes.

What are the implications of these changes?

The directive requires that companies, especially big multinationals, must report tax and financial data separately in all countries where they operate. In practical terms, this implies that if any company (or individual) is hiding in, say, some savings or current account with a Malta bank funds or incomes that should be taxable here or wherever (hence, one has to examine the source of such incomes), reasoning that it can get away because an existing FWT system only requires the banks to report account number and FWT levied, then, clearly, the local tax authorities are required by EU regulations not to limit themselves to just the account number and FWT retained and passed to the government.

The Times of Malta should know that tax-dodging structures often use the transfer of taxable profits from higher tax states to lower taxation states.

If funds are lying in an account in Malta that should have been taxed elsewhere, EU solidarity requires that such should be brought to light. And it is where information is brought out into the light that truth always lies.

Hence, yes, the need to amend the present FWT mechanisms.

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