Issue link: https://maltatoday.uberflip.com/i/1468112
INTERVIEW 19.5.2022 You were elected President of the Malta Institute of Accountants at the end of last year. What have been the biggest challenges during the first months at the helm of this Institute? e past few months have presented us with an exhausting list of challenges but exiting from the grey-list is undoubtedly our top priority so as to limit as much as possible the negative implications. We have addressed the issue hands on, work- ing hand in hand with regulators and key stakeholders, and conveying the neces- sary messages to our members, including through training, to support Malta's ef- forts in bringing itself in line with interna- tional requirements. However, it is imperative that we do not lower our guard. We have a collective re- sponsibility to maintain and continue im- proving on the quality that we have. We need to remain vigilant at all times and we need to maintain the higher standards that we have managed to achieve in recent months. Evidently, there are many other challenges which are deeply impacting our profession. e role of the account- ant in today's business world is changing significantly. An accountant is no longer just a number cruncher but a key, trusted business advisor. Accountants are sought after by clients for many reasons, including to enter a new market, evaluate financial operations and recommend best practices, identify issues and strategize solutions to help or- ganisations run efficiently; offer guidance on cost reduction, revenue enhancement, and profit maximization; conduct fore- casting and risk analysis assessments, advise on digitisation, and more recently on environmental, social and governance (ESG) matters - an area where the profes- sion demonstrates flexibility and an abili- ty to create value for businesses. How have the number of high- profile international stories related to financial crime, impacted the profession? e recent years have seen an unprece- dented transformation in the way we go about our business. Increased legislation aimed at fighting financial crime and tax avoidance puts a constant demand on the professional to get up to speed with new developments, invest in new skills, and more. Practitioners need to adopt a critical risk-based approach, questioning the information provided to them by their clients, using professional scepticism and adding a level of interpretative accuracy to their work. Fighting financial crime has also brought about the need for a constant investment in technology adding to the ever-increas- ing compliance costs which may be quite taxing particularly on the smaller and medium sized practices. As an Institute, we therefore seek to guide and train our members to better understand the extent of their responsibility in the context of tax crimes, the investigative skills required, the technology required, as well as the expectations of stakeholders in the field. Authorities are currently in a race against time to pull out Malta of the grey-list at the earliest possible. Looking beyond these timelines, what role can accountancy profession play in shoring up the Maltese jurisdiction? We lead by example. We do not want to be out there saying what others should do without looking at ourselves. We have taken a proactive role on differ- ent fronts. We have worked extensively on the matter over the last few months, collaborating closely with the National Coordinating Committee on combating Money Laundering and Funding of Ter- rorism within the Ministry of Finance together with authorities/regulators such as the FIAU and the MBR. We have also facilitated communication between the authorities and our members through the organisation of town hall meetings for our members. roughout this period, we have made recommendations, challenged perspec- tives, and taken the lead in contributing towards the development of new laws and regulations on the subject, including aligning the profession's regulation to to- day's realities. In parallel, we have sought to serve as a bridge between the regulator and the accountant. Communication is key in such situations, and we have made sure that the local practitioner is contin- uously informed and trained within the context of any new or updated regulations or practices. At the same time, we have been adamant with authorities on the need that a sense of proportionality is respected at all times and all levels. Business and entrepreneur- ship cannot be stifled with over-regula- tion and excessive bureaucracy, and we really try to push back on a one-size-fits- all approach. Over the past years, economic growth has increased the need for accountants, so much so that many firms are looking at importing talent. What is the MIA doing about this? is is another big disruption we are fac- ing. Despite our educational institutions giving us hundreds of new accountants every year, the demand continues to out- strip supply. We are addressing this issue in a number of ways. Long-term, we are investing in an educational campaign tar- geting students in senior schools. During our visits to schools, we seek to increase awareness about the opportunities that lie ahead. Our objective is to show students the relevance of being financially literate and the doors that accounts as a subject can open, including an accountancy qual- ification. But the indications in the market are that an increased local supply will not be enough and that foreign accountants will need to supplement the local supply. We are competing for talent with other top European financial centres and unfortu- nately, we are still facing various challeng- es beyond our control, which thus reduc- es Malta's attractiveness for talent. For example, by the time a candidate is recruited, it normally takes between four to six months to obtain the necessary work permits and visas for third country nationals to be able to start working in Malta, which we consider rather exces- sive. Also third country candidates are only permitted to bring their immediate families to Malta after having worked in Malta for one year. We need as a jurisdiction to review these processes to ensure that Malta's re- mains attractive for professionals seeking a career in Malta. Over the past few years – even months – climate change has risen from being a backburner issue to a matter of immediate concern. How has this impacted the profession? Professionals in the business and public sectors are becoming more conscious of their greater responsibility for sustain- ability as a result of changes in the envi- ronment around them. Sustainability has been a buzzword for many years. is is no longer the case. Sustainability choices are reflected in investors' and consumers' demands. ey want to know how a company treats its employees, how it sources its products and how it disposes of its waste. Being sustainable is no longer "a plus" for a business – it is a matter of survival. Yes, ESG will bring about new rules and regu- lations, but it also creates new opportuni- ties for growth. Even here, we have taken the lead to ac- tively contribute to this change. Last year, our Biennial Conference was focused on this key thematic. A specific Commit- tee was also set up to focus on this area and proactively provides feedback to key stakeholders and works on necessary guidance and training for our members. Another big challenge coming up for the Maltese financial service jurisdiction is the planned reforms at EU and OECD levels related to the harmonisation of tax. Now the Government has also announced plans for a reform of the current corporate tax. What are your views on the matter? is is an unescapable reality. Tax sys- tems have to change – it has happened before, and it will happen again. It is time for a revamp and we are confident that the authorities will yield a new tax system which addresses the present realities. We shall also be dedicating time to this issue at our annual small and medium practi- tioners conference later this month. We understand that this area is of interest to practitioners and business-people alike. What matters now is to simultaneously work on Malta's competitiveness. is in- cludes reducing bureaucracy and ensur- ing that new legislation does not unnec- essary increase bureaucracy. Secondly, we need to identify new niches in which the country can attract foreign investment as a centre of excellence. irdly, we need to address the elements which will truly make of Malta a place where people want to set up a business and work. It is useless wanting to develop a specif- ic economic niche and then finding, for example, as I mentioned earlier, that it is challenging and cumbersome to recruit foreign talent into Malta. It is the time to take important decisions that will chart Malta's future course. e Malta Institute of Accountants' SMP Conference – e Next Leap Forward: Succeeding through Change will be held on 24th May 2022 and the PAIB Con- ference – Creating Value from Emerging Trends in Business will be held on 25th May 2022. Both events will be held at the Radisson Blu Resort. Exiting the grey-list should not be an end in itself. We have put on a lot of work to build the reputation of the Maltese financial jurisdiction but we have a collective responsibility to maintain and continue improving on the quality that we have achieved, says DAVID DELICATA, President of the Malta Institute of Accountants A reputation based on quality