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9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 A silent scandal is unfurling be- fore our eyes. rough legal notice 419 of 2021, the Minis- try of Finance published new taxation rules that will allow defaulting tax- payers to not pay any tax due on the transfer of property purchased before March 2021, against their arrears. e measure has been roundly criticised. e legal notice indeed suggests that tax defaulters that do not have the money to settle their dues promptly, can only do so by liquidating their property. It sends a very wrong message that those who default on tax payments to finance speculative activities, may also end up delaying settlement of trade cred- it indefinitely, to the detriment of businesses that supply them. As the Chamber of Commerce said, such practices are extremely damaging and need to be discouraged. e Malta Developers Association (MDA) disassociated itself from the rules, which allow defaulters to be exempt from tax on property trans- fers to the extent that they are in ar- rears. e measure was dubbed an unfair practice by the Chamber of Commerce: "Like every other scheme intended to bring taxpayers in order, this scheme benefits only the default- ers, and does not consider those who have their tax payments in order." Malta's construction lobby – under public scrutiny as the possible ben- efitter of the rules – said the meas- ure was discriminatory: "e MDA agrees that government should find a way to collect tax arrears from de- faulting tax-payers but there are var- ious ways how this can be done with- out creating an unlevel playing field." ey recognised that the measure would lead to unfair competition, with anyone benefitting from such incentive being in a position to offer the property at a better price to that of the developer. But the measure is also discrimi- natory against people who are not owners of immovable property, and insisted that this is not an amnesty for developers; because developers pay their final withholding tax with every contract signed and therefore, as developers who pay their tax at source, these will not be benefitting from such incentive. Both the Malta Institute of Taxation and the Institute of Financial Servic- es Practitioners called them "unde- sirable and untenable". Indeed, this newspaper cannot un- derstand how such rules came at a time when Malta's greylisting had highlighted Malta's lack of rigour in taking action against defaulting tax- payers – as claimed also by finance minister Clyde Caruana – and yet these controversial rules undermine the spirit of the fightback on the FATF greylisting. e FATF identified three key areas in which Malta was found wanting and which it has to act upon. ese are an increase in focus of the FI- AU's financial analysis on serious tax offences and related money laun- dering; increase the use of financial intelligence in pursuing criminal tax and related money laundering cas- es; and improve the identification of inaccurate beneficial ownership in- formation provided by Maltese legal persons. Malta has in turn pledged to focus its financial intelligence capabilities on tax evasion and money launder- ing in a commitment to the Financial Action Task Force. e lack of prior consultation, or underlying rationale or justification, shows that the government must re- consider its implicit endorsement of unlawful behaviour of this nature. e Nationalist Party is right in fil- ing a motion to have the legal notice repealed. Shadow finance minister Mario De Marco yesterday said the government is obliged to promote tax morality. Yet this legal notice throws fiscal morality out of the window. Tax amnesty is wrong 18.11.2021

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