Current Affairs
PM defends Malta from euro-parliamentarian criticism in Malta debate

During a debate that lasted 90 minutes and in the presence of 50 MEPs, Prime Minister Joseph Muscat explained the way Malta’s tax system works while also rebutting criticism that has been made regarding the Panama Papers and the Rule of Law in Malta.

The Prime Minister remarked that the Panama Papers had not just mentioned a Maltese Minister but also several officials in European institutions. He said that a month ago he had declared he would be appearing before the PANA Committee after the conclusion of the Magistrate’s Inquiry into what he said are lies made against his wife and he so as to present the true facts which had been twisted about the situation in Malta.

Dr Muscat maintained that some of the conclusions made by various spokespersons had been denied by institutions such as FIAU and he referred to Malta’s tax system which he said had been in place for scores of years but according to European and OECD regulations. He said his Government and its Presidency had shown a commitment to enable progress in EU taxation.

Dr Joseph Muscat said that during the last four years there were improvements in the Rule of Law with the introduction of legislation to address corruption as well as to the appointment of Judicants independent from Government by an independent committee. He also promised that in his new legislature the immunity of Members of Parliament will be removed and a code of ethics will be introduced for public officials.

During the debate there were 30 interventions by MEPs from various political groups who linked various aspects and practices linked with financial services in Malta and which are raising suspicions the country is a tax haven while others said that allegations being made against Malta are of a lesser dimension than the more serious dimensions of events that have taken place in other European countries and institutions.

The PEP Group Chairman Manfred Weber said that Dr Muscat still has an opportunity to address corruption and asked what results had occurred from new legislation that has been introduced, while Sven Giegold from the Greens said he has asked the Commission to investigate Malta on the licensing of banks as well as money laundering systems in Malta.

The Vice Chairman of the Socialist Group and European democrats Jeppe Kofod said that a plenary session was not the adequate forum to investigate what is happening in Malta before investigations are completed by the PANA Committee. He asked how Malta is planning to fight against tax evasion and money laundering.

There were also interventions by five Maltese MEPs, with the head of the PN Delegation David Casa stating that he is ready to help Dr Muscat to defend Malta’s reputation if the Prime Minister shows clearly his intentions to rectify the harm that has been done, while the head of the PL Delegation Alfred Sant said the Malta Government has already stated it will address mistakes that have been made while he emphasised that Malta is observing the Rule of Law because currently four inquiries are taking place and being conducted by four independent Magistrates while he also maintained that Malta’s financial services sector is operating according to EU and OECD regulations.

Dr Muscat expressed his surprise that in a debate that was supposed to be taken at a serious level there were some MEPs who had not bothered to check their facts before making their interventions.

During the debate’s opening Minister Helena Dalli in the name of Malta’s Presidency of the EU Council said the fight against tax evasion, money laundering and fraud were priorities in Malta’s term of presidency, including an anti-tax avoidance directive and double taxation mechanisms to enable greater transparency and greater exchange of information, particularly during the last 12 months to enable the obtaining of more information regarding companies.

EU Commissioner Pierre Moscovici said the Panama Papers had a great impact on public opinion, so much that the EU Commission has promised to fight against tax evasion and greater support is being given to the EU Parliament. He said there has been a change in information exchange as a result of the directive which obliges EU Member Countries to take measures and these backed with thanks by Malta’s Presidency and the Finance Ministry. He maintained that the Commission will address abuses found by the PANA Committee if it resulted that millions of euros in VAT on commercial transactions were resulting from any EU country.

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