Citizenship scheme is substitute for new taxes, minister says

Home Affairs Minister Manuel Mallia this evening defended the Individual Investor Programme, asking repeatedly on TimesTalk how the revenue would be substituted if the programme was dropped.

The programme has raised controversy because it involves the sale of Maltese passports for €650,000.

Dr Mallia said that according to the Budget projections, the programme was expected to yield €15m next year. The funds would be used for the people's better quality of life.

If the programme was to stopped, where would the money come from? Did the PN want the government to introduce new taxes?

Opposition spokesman Jason Azzopardi retorted that the Nationalist government had been able to cut taxes without selling a single passport.

Carmel Cacopardo, representing Alternattiva Demokratika, said that while the programme would yield income, one had to be concerned about the harm caused to Malta's reputation by the negative international coverage. Malta could end up gaining from one hand and losing from the other, particularly in sectors such as financial services which depended on Malta enjoying a sound reputation.

Dr Mallia said he did not think Malta's reputation was harmed by the overseas coverage. The harm was being done by the negative comments of the PN and its bloggers as well as whoever said he would go to the European Parliament to stop the scheme.  Had the PN been re-elected, Malta would have seen an increase in taxes, including a new tax on waste. Instead of taxes, the new government was trying to attract high net worth investors, but this programme had to be attractive.

Asked why the programme was not in the electoral programme, Dr Mallia said the government could not reveal its plans to other countries early.

Governments, he said, were not bound solely to their electoral programmes and took other initiatives in the legislature. He was confident that two years down the line, everyone would be singing its praises.

Dr Azzopardi said citizenship should not be something sold off the shelf. This government had enacted the law despite widespread criticism and then withdrew a central element of it on the day it was published. The PN, he insisted, was not being negative and had called for consensus.

That the minister was not even concerned by the damage done to Malta's reputation was even more worrying. Such a programme, he insisted, should be linked to investment and residence.

Mr Caccopardo said that rather than being sold, citizenship should be made possible to those who invested significantly in the country.

Dr Mallia said one could set up a factory, get a passport, then close shop after a year. What then? One could similarly buy property here, putting upward pressure on property prices. But was that what the people wanted?

It was difficult to attract high net worth investors but the programme was one way of doing so. The promotion would be done by a world renowned international firm which in the past was also praised by the PN.

The firm, Henley and Partners, would carry out careful due diligence and therefore talks about the programme attracting terrorists, money launders and the mafia was scaremongering.

Dr Azzopardi said no European countries had offered citizenship without linking it to investment or residence. And it was humiliating that the government had surrendered citizenship to Henley.

Dr Mallia said one could not just stick to traditional methods, this programme was an innovative way of attracting high worth people to Malta. He did not know what the PN was opposing. Could this be political opposition because of the revenue this programme would yield?

"We believe in this programme and I am convinced we will have citizens who will give a contribution which the people will benefit from," the minister said, while adding that the government was prepared to discuss and amend the regulations as necessary.

Dr Azzopardi said the law needed to be changed in order to save Malta's reputation.

See a repeat of the programme on the widget in this page.