Issue link: https://maltatoday.uberflip.com/i/1498223
4 maltatoday | SUNDAY • 30 APRIL 2023 NEWS MINISTRY FOR ACTIVE AGEING Expression of Interest for Lease of Property Ref: MFAA EOI 23.01 The Permanent Secretary of the Ministry for Active Ageing has issued an expression of interest (EOI) for the lease of property. Interested parties may download the EOI pdf document from the official website mfaa.gov.mt under Publications. Request for the EOI document may also be acquired by sending an email requesting the document and including the reference of this EOI to: finance.mfaa@gov.mt . The closing date of this EOI is Friday 2nd June 2023 at 10:00am. JAMES DEBONO THE removal of Gżira's fuel sta- tion next to the Manoel Island bridge will still be required "for road infrastructure purposes", the Lands Authority has told Malta- Today. But discussions on possible "al- ternatives" on relocation are on- going. On Wednesday, the Court of Appeal, presided by Judge Law- rence Mintoff, confirmed an En- vironmental Planning and Review Tribunal decree which annulled a decision by the Lands Authority to reclaim part of a public garden in Gżira, which had been devolved to the Gżira local council. The decision was hailed as a major victory for the Gżira local council led by mayor Conrad Borg Manche, whose campaign against the relocation of the fuel station to 930sq.m of garden space was sup- ported by an 8,000 strong petition. Asked by MaltaToday whether the authority will persist on any further attempts to take back part of the Council of Europe Garden from the local council, and wheth- er alternative locations are being considered for relocation, the Lands Authority said the fuel sta- tion removal was still required for road infrastructure purposes. While pointing out that this re- quirement "highlighted by Gov- ernment many years ago still stands" the spokesperson add- ed that "alternatives have to be sought through the competent authorities". Asked whether the Lands Au- thority is involved on any discus- sions to relocate the fuel station and whether alternatives are being considered to the public garden, the spokesperson said: "It is public knowledge that alternatives were discussed prior to the court judg- ment and irrespective of it." In a recent interview with Mal- taToday Prime Minister Robert Abela revealed that he has sent a message to the authorities to explore an alternative solution, but remained non-committal on whether the station will be relo- cated elsewhere. He said prelim- inary talks had started. "I under- stand the priorities and concerns of Conrad Borg Manché, who is sending a strong message and believes in his cause and I admire him for that, but there are also the rights of the fuel station own- ers, and I believe we can sit down around the table and with good will and common sense bring to- gether the conflicting interests," Abela said. Gzira petrol station will still be relocated – Lands Authority Government is still considering alternative ways on how to relocate petrol station CONTINUED FROM PAGE 1 "Malta's current system of re- funds means companies pay an ef- fective tax of 5%, which means that the companies that do fall within the threshold of the new rules will have to be charged at 15%, denying them the tax advantage of being in Malta," the practitioner said. Details of how the new compa- ny tax will look have not yet been made public with Finance Minister Clyde Caruana saying last month that a draft proposal was being run through simulations to determine its impact on government revenue and the economy. Asked to comment about the unease among foreign investors, Caruana told MaltaToday that work was still ongoing to establish the way forward and "any conclu- sions at this stage are premature and potentially damaging to the process". He said the government is work- ing with all stakeholders, including practitioners, to transition to a corporate tax system in line with the agreements reached at the OECD and the EU. "The international agreement on the 15% minimum tax has a global effect and the government is con- sulting relevant companies that are in scope; companies forming part of groups of companies with a consolidated turnover that ex- ceeds €750 million," he said. Without elaborating on how the tax system will change, Caruana said the work being carried out is "consistent with the aim of Malta remaining a competitive and at- tractive jurisdiction where to in- vest". But practitioners are concerned over the impact the new tax re- gime could have on the country's ability to attract foreign invest- ment by large reputable firms. "It will pose a huge challenge for an island economy on the periph- ery of the EU," the senior practi- tioner said. "It will make it harder to attract companies seeking a foothold in the EU." His sentiment was shared by a financial services practitioner, who chose to remain anonymous to protect client confidentiality. "I am not privy to the confiden- tial talks between Finance Ministry officials and key stakeholders but the EU's insistence on introducing the new rules by 2025 despite the OECD allowing for a transition period is causing jitters in the mar- ket with clients asking what will change and how," he said. Companies know the new tax system will be introduced globally but lack of clarity from the govern- ment is causing uneasiness across the board. In the absence of fiscal advan- tages, Malta will have to find oth- er incentives to retain and attract new business, which is why gov- ernment has to have a strategy, he added. "A comprehensive 10-year strat- egy for financial services has been drawn up by the Malta Financial Services Advisory Council and it includes more than 175 initiatives but getting there will require time, which is why a transition period is important," the source said. Lower tax, higher revenues But not all practitioners have a negative outlook. A senior prac- titioner with another of the big four firms is confident Malta will find solutions to attract new in- vestment like it did more than two decades ago with the tax refund system. He said the financial services strategy unveiled in March by the advisory council outlined various initiatives that could offer new in- vestment routes. Telling MaltaToday that he is not privy to the details of what the government is considering, he said the new tax regime if applied to domestic businesses as well could actually incentivise Maltese com- panies to declare higher earnings because they will be paying less tax. "It makes little sense for com- panies that are already based in Malta to move to another EU ju- risdiction, or anywhere else for that matter, because they will face the same minimum tax rate. But for Maltese companies that never benefitted from the refund system, a lower tax regime could serve as an incentive to declare higher earnings to the benefit of the pub- lic purse," he said. He noted that in the gaming sector, which is traditionally very tax-sensitive, Malta has managed to create a successful cluster that goes beyond the advantage of pay- ing low taxes. "It is true that tax incentives may have been an attraction but the gaming cluster is strong and Malta is the jurisdiction to be in because of its regulatory regime and good reputation, among others," he said. Losing the 5% tax rate As things stand today, Maltese companies are liable to the top tax rate of 35% just like personal taxes. However, Malta applies an impu- tation system that affords compa- nies generous refunds on profits that are taxed here. This system effectively reduces the tax rate for companies to 5%. EY's attractiveness survey last year showed that corporate tax- ation, as in previous years, was viewed as the parameter that most (71%) existing foreign investors think is attractive. The second-strongest parameter was the stability of the social cli- mate (69%) with telecommunica- tions infrastructure (68%) placing third. The tax imputation system was cleared by the European Commis- sion when Malta joined the EU. But over the years, larger countries like Germany and France applied pressure to have corporate tax- es harmonised across the EU to stop large companies from shifting profits to low-tax jurisdictions like Malta. Taxation within the EU is a na- tional competence and any chang- es to this require unanimous sup- port at Council level. Unanimity was achieved last December as the EU settled for the global minimum tax of 15% agreed at OECD level. 'A huge challenge for an island economy' Clyde Caruana