Current Affairs
Finance Minister says Malta will strongly object to changes to unanimous agreement on tax

Finance Minister Edward Scicluna said that Malta will be strongly opposing the suggestion that decisions on tax issues will no longer be decided unanimously by EU member states.

He stated this as the European Commission launched a debate so that these decisions will start being taken by a qualified majority, thereby removing the veto on tax issues.

The day after the EC launched its debate on the reform on EU taxation policy, Minister Scicluna told TVM that Malta would be opposing any changes to a unanimous system in how decisions regarding tax are taken.

“Malta will be strongly objecting to this step and we will not allow it, because permission is required by all EU countries to change the procedures on how this is done.”

The EC is proposing that there should no longer be any need for all the EU countries to agree on tax matters, but that a qualified majority should be enough as happens in other sectors of EU policy.  The Commission is arguing that in this way, member states can reach more effective and democratic compromises within a shorter timeframe.

Minister Scicluna said that various reforms in the EU taxation system have already been made despite the fact that there is the right to a veto.  He said that the treaties clearly state that taxation is the responsibility of each individual state, but directives may be made as has already happened in the past.

“There are those who think that you must remove the veto to force a country or countries to do something. We know this is not true because there are those who are giving the impression that Ireland, Luxembourg and Malta have some kind of interest in not changing the taxation system,” said the Minister.

The Minister pointed out that there are other countries, including the Baltic states, Sweden and Denmark who are opposing certain ideas which are not beneficial to European competitivity, such as the digital tax.

The Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici said that if the need for a unanimous vote in this sector made sense in the 50s with six member states, today it no longer made sense. He argued that the rules of a unanimous agreement in taxation are very problematic.

Mr Moscovici said, “we can’t keep with unanimity in the 21st century for decision making given that we need to deliver public good by means of taxation.”

The EC said that because of the rule of unanimity there are proposals, including those for fiscal justice, which have been blocked for many years.

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