The controversial tax exemption scheme announced recently will not be revoked despite mounting criticism from stakeholders and the opposition, Finance Minister Clyde Caruana said on Thursday.

In comments to Times of Malta, as stakeholders continue to speak out against the scheme that exempts people from paying tax on property transfers to set off arrears, Caruana said he had no problem debating the issue in parliament but the measure would not be removed.

Video: Jonathan Borg

“I don’t see the point why I should have to cancel it [the scheme], far from it. There were also accusations that we are trying to do something that goes against FATF, greylisting, and so on… far from it.

“It is a measure intended to, as much as possible, cover tax arrears. I have every intention to get as much as possible of these arrears into the government’s coffers,” Caruana said.

The new measure was quietly introduced through a legal notice earlier this month. It allows those with tax arrears due by January 2021 to pay any taxation due on the transfer of property purchased before March 2021 against their arrears. The government has since then clarified this is a temporary measure aimed at helping businesses during the pandemic.

The Nationalist Party has already said it will table a motion in parliament to repeal the controversial legal notice, insisting it had “reservations that have yet to be addressed” despite the legal notice coming into force on November 8. 

On criticism by independent candidate Arnold Cassola that the scheme constitutes “blatant hidden state aid to the Nationalist and Labour parties”, Caruana denied this was the case.

He once again argued the measure is aimed solely at collecting taxes and denied Cassola’s claims. “I don’t see any basis for that kind of criticism. Nor is it something that was purposely done to be favourable to developers,” he said.

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