Malta was a “fiscal black hole”, anti-poverty organisation Oxfam said, adding the country facilitated aggressive tax planning.
The international confederation of over 20 NGOs has just published a report highlighting the world’s worst tax havens.
Oxfam’s economic analysis of Malta, based on the latest Eurostat figures, showed that the island functioned as a tax haven, the report’s author, Johan Langerock, said.
“For example, very high inward foreign direct investment (FDI) relative to a country’s economy is usually related to offshore structures,” he said.
Oxfam analysed the balance of inward FDI stock minus outward FDI stock, Mr Langerock added. In the case of Malta, this was 971 per cent, compared to its gross domestic product, he noted.
Mr Langerock insisted this was extremely high, with most countries’ being between 30 and 40 per cent.
Malta’s taxation system would be blacklisted by the EU but for a system giving member states an automatic exemption
Malta’s taxation system would be blacklisted by the EU but for a system giving member states an automatic exemption, according to Oxfam’s report.
Malta had a few harmful tax schemes, like national interest deduction and the absence of withholding taxes on interest, royalties and dividends, Mr Langerock said.
He noted that concerns on tax avoidance needed to be tackled. More political will was required not to offer “harmful” tax incentives to multinationals, Mr Langerock advised.
In its report, dubbed ‘Off the hook: how the EU is about to whitewash the world’s worst tax havens’, Oxfam criticised the European Union for allowing countries like Malta not to be blacklisted.
The EU blacklist did not take member states into account since it believed they already “complied with tax criteria”, it said. Oxfam has repeatedly decried Malta as a tax haven. In 2017, it said the island should be included in the EU tax haven list on the basis of its “fair taxation criteria”.
The organisation annually expresses its concerns that EU governments will present a weak or even empty blacklist in an annual assessment. When Malta held the EU presidency it had publicly advocated for an empty blacklist, Oxfam noted.