Alfred Sant’s take on Tax Harmonisation
MEP Alfred Sant has on numerous occasions stood his ground on Malta’s stance against tax harmonisation in the European Parliament. However, in an interview with this newspaper, Frans Camilleri, a governor from the MFSA, had stated that Malta was not against Tax Harmonisation on certain principles, yet remained adamant that Malta would oppose tax harmonisation rates.
The comments led to some controversy, with the Opposition calling on the government to clarify its position on tax harmonisation.
Speaking to The Malta Independent, Dr Sant responded that he did not understand the difference between tax harmonisation and harmonisation of tax rates; adding that “it always seemed to me that they covered the same ground.”
The MEP explained that there is a certain group of EU countries which have been pressing for harmonised tax rates that start from the concept of an effective minimal rate of tax.
“I always understood we were against this,” he noted.
Sant agreed that when EU countries pushed for reform in taxation, regarding tax evasion/avoidance/ aggressive tax planning which happens under conditions of secrecy afforded by the tax policies of member states. “Malta has no problem with this, our reply is to: ensure transparency macro and micro, in all tax dealings with people/corporations who work through our financial services system.
“There should just be no political or technical problem for us therefore to implement all well-articulated provisions relating to transparency and so on in money laundering and similar EU directives,” he added.
“On the other hand, peripheral and small economies in the EU, especially within the Eurozone, have to retain the flexibility of tax competition. Otherwise they will end up subjected to the same constraints of companies in the central continental area, which benefit from endowments and market proximities that the peripherals do not have.
“If the Malta government position on this matter is changing, one would like to know,” he concluded.