European Parliament President Roberta Metsola has warned financial services practitioners that the Malta tax refund to foreign companies in Malta can only serve as an incentive for a short period.
In his speech at the Institute for Financial Services Practitioners’ annual conference, Metsola told attendees that “taxation is just a pull factor” and that around the world, it’s not even a mainstay of a successful financial services industry.
“We can’t reflect the negative stereotypes of what people expect from a low-tax jurisdiction,” Metsola said. “We need to fix the system to give investors confidence that not only will they seek justice, but can do so without having to wait decades,” she added.
Tax relief has long been seen as the main attraction for foreign direct investment in Malta. However, this has led to intense pressure within the EU to abandon this system and agree to harmonize corporate taxes.
In his speech, Metsola also acknowledged the continued pressures the Maltese economy is facing as a result of FATF gray listing, which has forced companies to “look carefully” at how they conduct business.
“A big part of the gray list is of course anti-money laundering. As the pressure on budgets increases, the need to clamp down on hidden or undeclared wealth will also increase,” Metsola said. .
Metsola also took the opportunity to advise against the rampant construction and sale of so-called golden passports, warning that “we risk killing the golden goose for a quick injection of cash”.
“It was economic, political and security myopia to create a sphere of economic activity based on the sale of passports,” she said.
Towards the end of his speech, Metsola also expressed the need to reform the education system so that it prepares students for a reality where lifelong learning is not just an asset, but a necessity..
“My fear is that if we don’t instill the critical thinking you need in this world, our country will become more of a follower than a leader,” Metsola said.
This article is part of a content series called Ewropej. It is a multi-editorial initiative funded in part by the European Parliament to bring the work of the EP closer to Maltese citizens and keep them informed of issues that affect their daily lives. This article reflects the views of the author only. The European Parliament is not responsible for any use that may be made of the information it contains.
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