Issue link: https://maltatoday.uberflip.com/i/827043
maltatoday, TUESDAY, 23 MAY 2017 5 News Chamber of Commerce calls for task force on Malta Files JEANELLE MIFSUD THE Malta Chamber of Commerce, Enterprise and Industry has called on all technical and professional financial services stakehold- ers to form a task force to deal with the effects of the publication of Malta Files. Relying on 100,000s of documents published by the European Investigative Col- laborations, the Malta Files detail how the island is used as a European centre of tax avoidance. Although profit- ing from the advantages of EU membership, Malta also welcomes large companies and wealthy private clients who try to dodge taxes in their home countries. Every year, Malta receives over €240 million in interna- tional tax receipts thanks to its unique tax system, which gives foreign shareholders up to six-sevenths of the 35% tax they pay on profits generated overseas and booked in their Malta holding companies. According to the Chamber, the Malta Files episode trig- gered "a series of attacks on the integrity of the country's fiscal structures and finan- cial services industry." "There has never been a time when the country need- ed to form a common and undivided front more than today," it said. The Chamber added that it is offering its 170 years of experience, to bring together all impacted stakeholders to produce a common front on this issue. "In an open and invest- ment-based economy like ours, the Malta Files and the ensuing inferences endanger the entire economy. We need to build on the decades-long political consensus that con- tributed to the setting up and continued success of the financial services industry," it said. Both Prime Minister Jo- seph Muscat and PN leader Simon Busuttil have insisted the expose has not revealed anything illegal about Mal- ta's taxation system. Muscat dubbed the Malta Files "an unprecedented at- tack " on the island's finan- cial services, noting that nothing in the Malta Files was actually secret. On his part, Busuttil said he strongly disagreed with the reports, arguing that no offshore companies are reg- istered in Malta and that the island is not a tax haven. He extended the party's support for the financial services, adding that he PN will an- nounce its emergency plans for the financial services sector after meeting with financial practitioners this week. The Chamber welcomed the commitment by both po- litical leaders towards what it called "defending Malta's reputation", and called on them to continue to do so in a united fashion. Muscat says Busuttil tomatically resign at the start of a new administra- tion," he said. "Bannister has served long and well as MFSA chairperson, and I have absolutely no intention to personalise this situation but the time has come to ap- point a new face." Bannister has been head of the MFSA since its inception in 1999 and was previously in charge of its predecessor, the Malta Financial Services Centre. Busuttil was outlining the PN's plans for the financial services sector in the wake of the Malta Files. He said he will instantly clean up Malta's global rep- utation, appoint a high-level working group to draft a na- tional strategy for financial services, boost innovation at the MFSA, and ensure full independence of the MFSA, the FIAU and FinanceMalta. 'John Bonello never forgave me for MEP rejection' The PN leader also dis- missed claims by the PN's former international secre- tary, John Bonello, made at a Labour mass meeting on Sunday, that Busuttil had lied to him. Indeed, he suggested that Bonello has borne a grudge against him ever since he wasn't selected as one of the PN's MEP candidates back in 2014. "There was a pool of some 30-50 potential candidates and a commission was formed to pick around 10. Bonello wasn't chosen and it appears as though he's never forgiven me for it. However, I never lied to him and my track record on integrity speaks for itself." "Bannister has served long and well as MFSA chairperson, and I have absolutely no intention to personalise this situation but the time has come to appoint a new face" "In an open and investment-based economy like ours, the Malta Files and the ensuing inferences endanger the entire economy" Legislation changed to benefit BWSC "THIS is very frightening and sends a very dangerous mes- sage," the Labour Party leader said. On his claims yesterday that he would be taking newly- surfaced documents, relating to the BWSC power plant, to the Auditor General for in- vestigation, Muscat said the documents had been discov- ered in a file having nothing to do with the power plant. George Pullicino memo "A memo that was discov- ered shows that Enemalta was against the government amending the country's emissions legislation to suit BWSC," Muscat said. "It now seems that if then minister George Pullicino had not in fact changed the legislation, BWSC would not have been able to submit a successful bid for the power plant ten- der." With regard to the Malta Files articles being pub- lished, the Prime Minister said that this was a concert- ed attack aimed at tarnishing the country's reputation but insisted Malta's fiscal system was fully legal and approved by the EU. "In a way, I cannot under- stand why this happened, but maybe it was our turn after Ireland and Luxembourg," he said. Muscat insisted no for- eigner could use Malta's tax structure to avoid paying the full tax he would pay in his own country on money earned there. "And I will not speculate on whether there was any hack- ing involved in obtaining the database, although all the data was already compiled online, if in a more restricted manner," he said. Muscat said that the PL was proposing that in the future, the chairperson of MFSA start appearing before parlia- ment to face questioning. Discussions on MFSA operations Muscat also revealed that a new Labour government will lower the tax payable on overtime pay, following a study to ensure the system would not be open to abuse. "We committed ourselves to this following the positive feedback we received when we decided to lower tax on part-time work," he said. Muscat said that the block- chain strategy would see Malta cooperate closely with international partners on a number of projects that could establish Malta as a pioneer in niche industries. "The technology inbred in the blockchain system being proposed would be of im- mense value to the lands reg- istry and medical records," he said. Muscat said that all the PL's measures were costed and were calculated to have a fis- cal net effect of 0.5% of GDP or cost around €50 million per year. Zrinzo Azzopardi said that Malta had benefited im- mensely from the stability brought about by this admin- istration. "Our country's strong economy is a result of our vision for prosperity with a purpose," he said. "Unfor- tunately we are now seeing some who are choosing to politicise a controversy that is targeting our financial ser- vices sector where we have before always acted in con- sensus for the greater good of the country." Silvio Schem- bri said that in the coming five years, the Labour gov- ernment would continue to work to maintain the econ- omy on the strong footing it had managed to reach under this administration. "This government has con- sistently rewarded hard work and was continuing to do so in its electoral proposals," he said. "The proposed tax refund for all workers who earn less that €60,000 is one measure that highlights our belief that hard work pays." Around 190,000 persons would benefit from this proposal and would receive a minimum of €200 in re- funds. Schembri said that the PL was focused on creating new niche markets with a 10-year strategic plan drawn up to lay down plans on how to make Malta more attractive to investment. The party had already iden- tified FinTech and logistics as two sectors that could en- joy broad success in Malta. Schembri said the govern- ment would also seek inter- national partnerships to at- tract more foreign startups to Malta. He said the digital gaming industry could also be suc- cessful and the party was therefore committed to work to attract development stu- dios of international renown. "A new Labour government will immediately set in mo- tion a plan to install a second internet cable between Malta and Europe," Schembri said.