Issue link: https://maltatoday.uberflip.com/i/1176480
maltatoday | TUESDAY • 15 OCTOBER 2019 15 BUDGET 2020 EDWARD Scicluna paid lip service to Malta's financial service as one of the island's most important of sectors, and pledged that the government would be working to strengthen this sector, which is one of the main sources of employment. "In 2019, the financial services industry of our country continued being strength- ened on the same basis as previous years, and this despite various domestic chal- lenges, but even more from the interna- tional front. The vision of the government is to make Malta a main jurisdiction, not just regional, but on a global level," Sci- cluna said. The minister said the government was exploring new economic niches in Fin- tech, Regtech, Blockchain, but also Arti- ficial Intelligence, cybersecurity, and the Internet of Things. On these latter niches, the Malta AI Taskforce has delivered an AI strategy which Scicluna said would place Malta amongst the top 10 countries in the world for this emerging sector. "Amongst other things we are starting an educational campaign, giving scholar- ships on the study of AI, founding an AI Innovation Hub, starting pilot projects on AI in the public sector, and working on a roadmap for technological infrastructure. "Digital security is another priority for this country. Cyberattacks are taking place every moment and at all times, and prevention is better than cure. We need to ensure that our experts have the best technology available, so we will be allo- cating funds to the Malta IT Agency to strengthen its security operations." Games and Esports Various measures will be announced for the development of video games and Es- ports, to create new niches in digital arts, games programming, and media produc- tion, and the attraction of such compa- nies to Malta. "The Esports sector is another impor- tant link in the sector of video games and the country's digital economy. This is an innovative sector that is growing expo- nentially on the international plane, and we will be investing to help this sector grow. Esports creates job opportunities on digital productions and events, at- tracting to Malta a new tourism niche," Scicluna said. Malta Development Bank The MDB is carrying out negotiations to implement schemes for guarantees for more banks, in a bid to be able to cover greater parts of the market, as well a co- financing with banks to improve access to credit for SMEs. The MDB is carrying out consultations with public and private entities, including commercial banks, so that in collaboration with other institu- tions, it can offer financial facilities for infrastructural projects, especially those with social dimensions such as affordable accommodation and education, as well as projects related to climate and the envi- ronment. Green bonds from Stock Exchange In 2020, the Stock Exchange will be im- plementing new initiatives to promote Green Bonds, which will be used to in- centivize investment in environmental projects, sustainable resources, and clean energy. FINANCE, COMPETITIVENESS, DIGITAL SECTOR Pledge to equip IT agency with cybersecurity expertise The Esports sector is an important link in the sector of video games and the country's digital economy IN one of the first government responses to the critical Money- val report from the Council of Europe, the Maltese govern- ment will be limiting cash pay- ments on luxury and durable goods to €10,000. The limit will be applicable on transactions involving real es- tate, yachts, art, precious met- als, and vehicles. Previously, the cash transac- tion threshold applicable to traders in goods to be consid- ered as subject persons was low- ered from €15,000 to €10,000. One of the main criticisms of the Moneyval report with re- spect to Malta was the issue of cash economy in the shadow economy. Malta is a relatively large international finance centre specialised in corporate and transac-tion banking and fund management. While Malta's fi- nancial sector is bank-centric, it is es-timated that Malta has a significant shadow economy because of the widespread use of cash, which makes the mon- ey laundering threat from for- eign proceeds of crime a high one, a consequence of the size and international exposure of Malta's economy. In general, remote gaming is inherently vulnerable to mon- ey laundering due to the high number of customers, mainly non-resident, the high volume of transactions, the non-face- to-face nature of the business and the use of prepaid cards, as well as the large and no-res- ident oriented corporate sector, legal professionals, accountants and real estate agents. The shadow economy ac- counts for a significant part of the GDP of Malta. Malta is a cash-intensive economy where many sectors rely significantly on cash transactions. According to Malta's national risk assess- ment, tax evasion is at about 5% of GDP. Cash is widely used in Malta – estimated to represent over 25% of GDP – but the 2018 NRA re- port does not include any detail as to the degree to which cash may be used for money laun- dering. There are also concerns regarding the seemingly inef- fective measures at the border to detect undeclared and falsely declared cash or to understand the source or even-tual destina- tion/use of incoming cash. FINANCIAL CRIME Cash transactions on luxury and durable goods capped at €10,000