Malta’s veto would not protect the island forever from tax harmonisation, Nationalist MEP candidate Peter Agius has warned.
He dubbed proposals by the European socialists to harmonise corporate tax rates as a very dangerous one for Malta’s competitiveness, particularly if they gained traction during the forthcoming MEP election campaign across the EU.
In a policy document launched ahead of the European Parliament elections in May, the Socialists and Democrats (S&D) are proposing a minimum effective tax rate of 18 per cent on corporate profits.
The document also calls for the removal of the unanimity required on certain tax issues to ensure that “no single member state can veto much-needed tax reform to its own benefit”.
Dr Agius insisted that Malta’s veto should not be used as an antidote to all of this.
“Our veto will not protect us forever from tax harmonisation. Suffice to say that, with the Lisbon Treaty, nine or more member states may proceed with an initiative of their own in a field where other member states are opposing progress through veto,”he noted.
He said such enhanced cooperation was already being envisioned for the introduction of a financial transaction tax, with large member states like Germany, France and Italy proposing a tax on share and bond transactions of 0.1 per cent.
Dr Agius said the “radical” proposal by the European Socialists could become another opportunity for enhanced cooperation which, although not directly applying to Maltese companies in Malta, would still be applicable to their operations in the continent, hence effectively eroding the competitive advantage of Malta-based firms.
He noted that while Labour MEPs had consistently opposed similar proposals, they were evidently “losing clout” within the S&D group.
Dr Agius said defending Malta’s tax competitiveness in the European institutions required a closer coordination of all Maltese efforts in Brussel, starting from essential gestures of teamwork and responsibility from the Labour Party, which must first reconsider its propaganda of branding all voices not toeing its line in Brussels as traitors in Malta.