It is a fact that the current domestic tax regime, originally put into force by a Nationalist government, has over the years attracted strong Foreign Direct Investment (FDI). The wave of FDI created jobs, expanded already existing local business and attracted foreign workers.  

All of these factors were important for the evolvement of our economy, but also for the domestic labour force in terms of their career learning curve, and culture amalgamation. Undoubtedly, the attractive tax regime was a positive for the local economy, which over the years has expanded drastically, when compared to other European peers.

Due to the lack of competitiveness, other European countries have been quite vocal in stating that they are being pinched by the fact that Malta and other countries within the common union have more attractive tax regimes. Their argument is that this is impending them from attracting FDI, which in turn is therefore causing a drag on their economic growth.

Lately, in his annual speech, Jean-Claude Juncker, the EU Commission president, reiterated his previous stance of rolling back national tax powers that have longed helped countries such as Malta and Ireland. It is clear that the commission wants to scrap national vetoes. This attempt will undoubtedly be fiercely defended by selective member states, including Malta.

Any local government currently in power will definitely object to such proposed change to its sovereignty, due to the fact that the recent strong expansion in the Maltese economy was triggered by niche economic contributors. 

Let’s not forget, therefore, that these contributors were attracted by the solid fundamentals paved way back by a Nationalist government.  Latest figures issued by the National Statistics Office show that FDI from the gaming industry and financial services have, to date, been vital contributors towards the experienced domestic economic expansion. Thus, clearly losing sovereignty in terms of tax regime will certainly trigger uncertainty on the future of such industries in Malta.

Rationally speaking, foreign investors look at other factors too, such as the capabilities of the local labour force, the cost of labour as well as the standard of living, among others. However, the domestic tax regime has, over the years, emerged to have a high weighting on final decisions as to whether or not one should open and/or shift operations to Malta. 

Furthermore, it is a fact that FDI has also triggered a ripple effect in other segments of the economy, mainly real estate and leisure. Thus, this is yet another clear argument of why we should, all together, oppose the proposed changes. The need to retain such a tax regime is clearly crucial for the sustainability of our economy.

Maturely speaking, this is not a question of rivalry between MEPs of opposing political parties but rather a matter of high national interest. 

The recent sound waves of pressures by the Commission are of huge concern to all of us and to the future of our economic stability

It is imperative that all six elected MEPs work together in tandem to impose the necessary pressures and lobbying in order to abolish such proposals currently being put forward by the commission. 

In my day-to-day house visits, I encounter the reality of meeting families who are very concerned about what is no longer simply the hearsay of a fiscal union. 

A union, which in turn, will indirectly affect their children’s jobs  -  jobs that over the years have built many a career in primarily the gaming or financial industry thus offering stability and also a better standard of living.

 Thus, yes indeed, the recent sound waves of pressures by the commission are of huge concern to all of us and to the future of our economic stability.

It is very clear that we are running out of time, given that for the commission it’s not a question of whether there is a need to move away from unanimity in taxation, but rather how and when to implement it. 

Thus, in my view it is imperative that we plan, act and take this issue very seriously in the coming months. I can assure that should I have the privilege to represent the Maltese citizens as their MEP in Brussels on the Nationalist ticket, I will work on the necessary safeguards to protect our tax regime, which has over the years proved to be crucial for our economy. 

We owe it to a Nationalist government since it had a vision on this front. Let’s roll up our sleeves and work together to protect what we were capable of creating over the years to sustain the future of our economy and families.      

Frank Psaila is a Nationalist MEP candidate. 

This is a Times of Malta print opinion piece

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