Issue link: https://maltatoday.uberflip.com/i/467065
25 Michael Falzon's public admission of having held some €465,000 in undeclared monies in a Swiss bank account – money he later repatriated to the country – reveals more about some of the alleged standard we exact of public officials, than about the realit y of undeclared foreign bank accounts. The esteemed political commentator, who writes on various newspapers – MaltaTo- day has proudly hosted the former minister for years now – yesterday issued a pre- emptive media statement on the origins of the money, a Swiss architectural project which required him to travel to the coun- try; its passage through bank accounts, one of them being the HSBC Banque Privée in Geneve currently in the news; and that he repatriated the money some time before 2008 under one of the government schemes that levied a no-questions-asked final withholding tax on the cash. Falzon, an architect by profession, explained that he had legitimately earned the monies deposited in this account well before his appointment as minister in the 1987 Eddie Fenech Adami administration. MaltaToday understands that Opposition leader Simon Busuttil took a very bold and confident stand after Michael Falzon's an- nouncement to resign the PN executive; he also warned that anyone with undeclared cash in overseas accounts should 'take full responsibilit y' for such tax avoidance and that he would push for their suspension from the part y. In politics, such brave statements are not made without the necessary guaran- tees that no further embarrassment will be incurred by the part y. Indeed, part y insiders contacted by MaltaToday were quick to note that shadow ministers were forewarned about whether they held unde- clared cash overseas. Falzon, it seems, was not given this opportunit y. It is left to the more seasoned of political and financial observers whether the list of individuals who parked their undeclared cash in the HSBC private bank in Geneva have any connections, past or present, to his part y's ranks or perhaps to legal firms connected to his MPs. Surely, if these account holders had repatriated the funds and can explain the origin of these funds, there is no reason why anyone should overreact. After all, it was successive Nationalist and now Labour governments, that encouraged Maltese account holders hiding their cash overseas, to pay a final tax on their repatriated funds so as not to risk being prosecuted for tax evasion – especially now with international financial information sharing. Like thousands at the time, Falzon held his funds overseas over fears of ex officio tax assessments during the Mintoff years in the 1980s. Having said as much, there is no doubt that the political class has to be transpar- ent and assure their constituencies that they adhered with Malta's tax laws. Beyond the apparent curiosit y that such revelations cause, it has to be said that we must draw a line somewhere, especially if the origin of funds can be explained and the funds in question have been repatri- ated. The real focus should be with those individuals who have failed to declare funds and who cannot justif y their source. Perhaps excessively, Busuttil conf lates the Swissleaks revelations with Falzon's admission: at the time of going to print, this newspaper is unaware whether Falzon is one of the names on the Hervé Falciani list that was leaked to the ICIJ and other European newspapers. Still, the Opposition leader has taken an important stand on tax evasion. Whether his principled stand also ex- tends beyond the thin line of banking and accounting gymnastics, to the world of tax avoidance is another matter altogether. MaltaToday is interested in knowing whether political leaders who take such principled stands should also be support- ive of the Maltese tax regime that allows international companies to avoid taxation regimes back home. Multinationals abroad park their profits generated from busi- ness in their home country, by setting up holding companies in Malta. Thanks to the 'Maltese sandwich ' system of setting up trading and holding companies, multina- tionals pay effective tax rates of just 5% in Malta so that they don't pay full corporate tax rates at home. This newspaper asks whether politicians should keep supporting tax avoidance structures in Malta so blindly, when it is clear that foreign businesses are using Malta to avoid paying millions in taxation somewhere else in Europe. maltatoday, SUNDAY, 22 FEBRUARY 2015 Editorial MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING DIRECTOR: ROGER DE GIORGIO MANAGING EDITOR: SAVIOUR BALZAN Tel: (356) 21 382741-3, 21 382745-6 • Fax: (356) 21 385075 Website: www.maltatoday.com.mt E-mail: newsroom@mediatoday.com.mt Quote of the week 'Unfortunately for Greece, they do not know how the rules and the Eurogroup work. They are completely new and that's a drawback for them.' – Finance Minister Edward Scicluna on the possibility of a Greek exit from the eurogroup Taxation and morality