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06.06.19 14 TAXATION MALTA'S taxation system is important not only for social partners and businesses, but for the country as a whole, social dialogue parliamenta- ry secretary Aaron Farrugia said, explaining that there are around 10,000 direct jobs, and thousands more indirect ones, behind this system in Malta. Farrugia explained this system has been successful in the past years. Recently, there has been a significant rise in foreign di- rect investment, so much that in the first six months of 2018, there has been an increase in €2 billion. Speaking at a meeting of the Malta Council for Econom- ic and Social Development (MCESD), the parliamntary secretary explained that the Er- nst & Young Malta Attractive- ness Survey last year revealed that 88% of those who invested in Malta chose our country be- cause of the favourable taxation regime. For this reason, it is im- portant to continue working to safeguard the present system. During this meeting, a pres- entation on the recent devel- opments in the area of taxation on the European and global level was delievered to mem- bers and social partners. Farrugia expressed his sup- port for measures which pro- vide added transparency, min- imise tax evation, and systems which contribute to improved and more sustainable econom- ic development. Meanwhile, he said that in order to address the country's challenges, it is necessary to be united behind our existing sys- tems, particularly in the con- text of changing realities with- in the EU. He also spoke of the need to form a new coalition of countries which have a direct interest in this sector in order to protect the present system – especially following Brexit. e taxation system in Malta was accepted by both the EU and the OECD before Malta's EU accession. But since then, further emphasis has been made by both the European Commission and the OECD on tax avoidance – that is, to min- imise tax in legal ways. is was explained by finance minister Edward Scicluna dur- ing the same meeting, as he ex- plained that Malta has adopt- ed a number of directives and legislations in order to be in comformity with other mem- ber states. is includes the Anti-Tax Avoidance Directive 1 (ATAD1) u l-ATAD2. Malta also participated in the OECD Global Forum on tax transpar- ency, as well as the BEPS Inclu- sive Framework which identi- fies different measures in order to minimise tax avoidance. On the topic of new forms of taxation, such as the Financial Transaction Tax (FTT) and the Common Consolidated Cor- proate Tax Base (CCCTB), the minister clarified that, contra- ry to the the impression that it gives, Malta is not the only country which is not in favour of these new forms of tax. In fact, less than half of member states support the introduction of these taxes, and only because it benefits them, according to the minister. He also said that in the Tax Justice Network report, Malta did not feature among neither the ten countries in the Corporate Tax Haven index – nor among the twenty countries in the same index. is index includes the countries which are considered to be doing the most to avoid corporative tax. In the list, six out of ten countries are EU member states or their de- pendants. Speaking at the same meet- ing, EU affairs minister Helena Dalli explained that taxation is an important national com- petence which safeguards the sustainability of the economic growth which the country is currently experiencing. Evidence of this is found in foreign direct investment and the measures undertaken to ensure that people have more money left in their pockets. For this reason, she said, it is important to ensure that our system is defended in line with EU treaties. Current taxation system needs to be protected, junior minister says Finance minister Edward Scicluna, EU affairs minister Helena Dalli, MCESD chairman John Bencini and parliamentary secretary Aaron Farrugia The taxation system in Malta was accepted by both the EU and the OECD before Malta's EU accession. But since then, further emphasis has been made by both the European Commission and the OECD on tax avoidance

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