Last Updated on Thursday, 19 September, 2024 at 12:16 pm by Andre Camilleri
The OECD has been at the forefront in the development of rules and standards in trade, freedom of capital movement, international taxation and corporate governance. “We acknowledge Malta’s unique position on corporate tax reform,” says Prof. Carmine Di Noia, the OECD’s director for Financial and Enterprise Affairs ahead of his participation at FinanceMalta’s Annual Conference on 29 November.
The OECD’s work is increasingly vital in addressing global challenges like climate change, digital transformation and geopolitical tensions through coordinated responses, helping policymakers understand the interplay between digitalisation, ageing populations and climate change while identifying synergies and vulnerabilities.
“By using internationally comparable data, the OECD provides tailored policy recommendations that account for regional specifics and we engage with diverse stakeholders including governments, the private sector and civil society to enhance analysis and recommendations. The OECD also promotes international dialogue and action during forums like the G7, G20, APEC and ASEAN to align global efforts for more economic growth,” explains Prof. Di Noia.
Prof. Di Noia explains how through detailed analysis, data-driven insights and recommendations across various areas, the OECD seeks to influence economic policies mainly through its Economic Outlook, which provides macroeconomic forecasts on global conditions, inflation, GDP growth and risks to help policymakers in monetary, fiscal and structural decisions.
“Our Economic surveys offer country-specific analysis and recommendations for national reforms and our broad policy focus ensures robust economic policymaking.”
“For instance, the Directorate for Financial and Enterprise Affairs leads work on markets and conduct, contributing to policy formation. Key publications like the Global Debt Report 2024 examine financial stability and policy considerations. The OECD’s work on capital markets, anti-corruption and business conduct drives global policy changes and has influenced important reforms in countries such as Latvia, Costa Rica, Bulgaria and Colombia.”
Recently, the OECD took the lead in addressing tax avoidance, particularly in calling for a global minimum tax of 15%. Meanwhile, Malta has secured a six-year exemption, allowing it to maintain lower tax rates until the end of this decade.
“Malta is recognised as a committed and constructive member of both the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) and the Global Forum on Transparency and Exchange of Information for Tax Purposes. The OECD continues to work closely and constructively with Malta on tax matters, acknowledging its engagement while addressing its unique position on corporate tax reform,” he said.
Asked about the OECD’s new areas of focus and how it is adapting its agenda to meet future challenges, Prof. Di Noia explained how the OECD is intensifying its focus on climate change and digital transformation to promote sustainable and inclusive growth.
“To support the net-zero transition, the OECD is advancing emission reduction efforts, particularly in hard-to-abate sectors, and fostering international cooperation through initiatives like the Climate Club. Its work on climate finance, adaptation strategies and the green transition is helping countries achieve climate goals while ensuring economic resilience, supported by projects like Net Zero+ and the International Programme for Action on Climate (IPAC).”
“In digital transformation, the OECD’s Principles on AI advocate for a rights-oriented, human-centric approach, setting international standards for AI governance to promote responsible AI practices. Initiatives like the AI Policy Observatory and the Global Forum on Technology help guide policymakers in managing risks and leveraging digital innovation while our Directorate for Financial and Enterprise Affairs updates tools and explores their impact on policy and business through reports on corporate sustainability and AI in finance.”
Asked for an assessment of Malta’s current financial services sector, its growth in the past years and its efforts to renew itself for more future growth, Prof. Di Noia acknowledged that Malta’s financial services sector has contributed significantly to the country’s economy thanks to a banking sector that supported borrowers during the Covid-19 pandemic and an increase of 6,500 people employed in this sector between 2019-2023.
“However, challenges like supply chain disruptions, inflation and geopolitical issues persist and this is why well-regulated and transparent financial markets are crucial for stability and investor confidence.”
Prof. Di Noia quoted the Global Debt Report, which emphasises investment in productivity and sustainable growth as well as Malta’s 2023 National Strategy for Financial Services, which aims to enhance payments infrastructure and to expand the talent pool.
“By improving financial processes and promoting digital finance, Malta can drive efficiency and innovation,” he added.
Last February it was announced that Malta was meant to forward its formal application to join the OECD. At what stage are these proceedings and how will Malta be expected to honour its membership?
“Following Malta’s announcement to strengthen ties with the OECD, Malta developed an OECD Action Plan covering key policy areas to enhance alignment with OECD bodies and legal instruments, while supporting domestic reforms driven by an Inter-Ministerial OECD Working Group, headed by the Ministry of Foreign Affairs, with participation from all line ministries.”
“We look forward to collaborating with Malta on the implementation of this action plan,” concluded Prof. Di Noia.
