Last Updated on Tuesday, 20 July, 2021 at 2:01 pm by Andre Camilleri
Malta needs to be open to negotiations with other countries regarding the international minimum level of taxation, with Finance Minister Clyde Caruana sure that the country will not “give up what it has achieved throughout the past decades — far from it”.
130 countries and jurisdictions joined a new two-pillar plan to reform international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate.
Speaking at the FinanceMalta’s annual conference about the international minimum level of taxation, the minister remarked that back in January he said that the country should be “agile and wise” in the way the country negotiates with this deal.
“It was becoming evident that what was happening at an international level most probably would challenge our tax regime,” he said.
The minister reiterated that what he said back then still stands, especially right now with the way things are evolving at Organisation for Economic Co-operation and Development (OECD) level.
The minister noted that he has been involved in discussions at different levels for the past eight months, and he remarked that he has “never seen the EU working at such a fast pace in order to enact something.”
“The way how the OECD is negotiating with other countries is that if there are any countries who are completely against this new idea, those countries are being told to leave the negotiating room and let the others decide. So we cannot from our side just say that we do not agree with this for the simple reason that that would mean that we would be completely excluded from the negotiations,” the minister observed.
He noted that the country should be wise enough to understand what others are after, “because if we understand what others are after, I can imagine and I can understand that even the other countries will understand what we are after.”
“At the pace of which such reform is being negotiated, I am quite sure that most of these countries would be willing to negotiate in order to make sure that this reform ultimately gets over and done with. In this spirit, I think that as a small nation together with other small countries, we can also negotiate and make sure that what we have achieved so far remains there. Negotiation is perhaps the best tool that we have in order to make sure that we continue to maintain what we have achieved so far,” he said.
Regarding the FATF greylisting, the minister said that the country “should not feel discouraged, but rather it should give us an incentive to work more in order to make sure that our financial sector emerges stronger after the necessary work that we need to do.”
The minister remarked that over the past two years, Malta made significant steps to address financial regulatory shortcomings, so much so that they passed the MONEYVAL test a few months ago. “Unfortunately, two out of the 50 indicators were deemed not to have delivered sufficiently enough by the FATF,” he said.
“A lot of work has been done. This is the message that all of us should convey, even to third parties especially abroad… we need more time in order to ensure that what we have legislated throughout the past months starts to bear fruit,” the Minister said.
Regarding the Maltese economic recovery from the pandemic, the minister once again reiterated that no higher taxation will be implemented in Malta so that the economy “lands softly”.