There is no such thing as an ‘economic miracle’. The term is a fallacy, a myth, invented to fit on a billboard that has little basis in reality. There are no miracles, only well- thought-out plans based on sound policy.

Economies are grown – for longer than the next headline – because policymakers think ahead, because those taking the decisions can see ahead of the curve and can understand that a sustainable economy is brought about by thinking of the prosperity of the next generation rather than an immediate cash-boost injection. Sustainability must be the basis of any economic policy, otherwise we condemn future generations to foot our bills.

It is this thinking that meant that successive Maltese governments set out a path to attract foreign investment, create jobs and generate wealth across the island. We used our size to our advantage and created industries as diverse as financial services, iGaming, maritime, aviation, pharmaceutical innovation and more. We moved from a low-wages economy to a high-skilled model.

We did all of this, largely because we managed our tax system to that end. We carved out fiscal incentives to ensure that Malta became a leader in certain fields with all the economic benefits that entailed. It was a long-term vision and one that paid off, but over the last years we have seen loopholes exploited that still need closing. We need a response that boosts enforcement while tackling any legislative gaps that have been exposed.

Our success was possible because we matched competitive tax management with strict enforcement. Our taxation system pre-dates our EU accession and there is no way that we would have been able to join the European Union without providing guarantees of our ability to weed out bad apples. Credibility is essential.

It is time to go even further and consider applying fiscal rules in place to attract foreign investment to Malta, also to selected Maltese industries

Reputation matters. On a European level, while any change to taxation rules requires unanimity, changes are being lobbied for that would mean a harmonised European taxation regime, a financial transaction tax, a common consolidated corporate tax base and the end of member states vetoes on matters of taxation for member states. In the European Parliament we will keep pushing back against any such attempts but with the United Kingdom due to leave the EU at the end of the month we will lose one of our traditional allies on this issue around the table.

With robust arguments, we can continue to reason that any such moves would have negative spill-over effects in the internal market, and particularly on the Maltese economy, but we cannot push back against this alone. The Maltese government, within the Council of Ministers and the European Council, must also continue to make its case effectively – as we have done since EU membership – that removing the exclusive competence of member states in this area would have a disproportionately negative effect on Malta.  It has become harder, but as the smallest EU member state, Malta knows that a one-size-fits all approach does not and cannot always work, especially when taking into consideration the country’s insularity and economies of scale.

Not being able to control the level of taxation for companies based in Malta would make us lose our competitive edge, endanger thousands of jobs and damage our economy at a time when we need to do all we can to remain competitive.

I am convinced that tax harmonisation is not the correct way forward for Europe, because inevitably in any such system it is our Union’s smaller economies that will be forced to bear the brunt. While the EU has a big role to play in combatting tax evasion, taxation issues like this must remain up to member states.

In fact, I would argue that it is time to go even further and consider applying fiscal rules in place to attract foreign investment to Malta, also to selected Maltese industries. We are in a position to do so.

We can use our fiscal know-how to continue to grow our economy by cutting taxes for home-grown firms too and we can be in a position to do so sustainably. We can leave a huge impact on our economy, on our social services, and our people if we manage to reduce the tax burden - and we can fund it by ironing out costly inefficiencies in our systems while remaining attractive to emerging technologies and a destination for new industries to develop aided and protected by avant-garde legislation and brave policy decisions.

It is time to kick-start this conversation and I will be addressing the TAX12 conference organised by Times of Malta and ARQ today to do precisely that.