Finance Minister Edward Scicluna yesterday agreed with his European colleagues that Panama should be put on the first EU list of worldwide tax havens.

The decision to draw up the list came after the release of the Panama Papers last year, in which Tourism Minister Konrad Mizzi was the only EU minister named.

The Panama Papers leaks revealed that with the Prime Minister’s chief of staff, Keith Schembri, Dr Mizzi had opened a secret company in Panama and a trust in New Zealand.

Both Dr Mizzi and Mr Schembri claimed that Panama was not a tax haven. They also both failed to declare their trusts and related Panama companies to the Maltese tax authorities.

The blacklist includes 17 non-EU countries which according to EU finance ministers are failing to meet agreed tax good governance standards.

Exercise should raise the level of tax good governance globally

According to the EU, “this unprecedented exercise should raise the level of tax good governance globally and help prevent the large-scale tax abuse exposed in recent scandals such as the Paradise Papers”.

In addition to the blacklist, the EU also published a ‘grey list’, which includes 47 countries that have committed to addressing deficiencies in their tax systems and meeting the required criteria following contact with the EU.

Pierre Moscovici, EU tax commissioner, said the adoption of the blacklist of tax havens marked “a key victory for transparency and fairness”.

He said the process would now continue so that pressure would intensify on listed countries to change their ways. He added blacklisted countries had to face consequences in the form of dissuasive sanctions, while those that had made commitments must follow up on them quickly and credibly.

Prior to yesterday’s agreement among EU finance ministers, European transparency NGOs including Oxfam argued that some EU Member States, particularly Malta, Ireland and Luxembourg, should be included in the tax havens list, as they served as vehicles for multinationals and the rich to evade tax.

However, Commissioner Moscovici rejected claims that any EU Member States were tax havens, though he admitted that countries like Malta and the Netherlands were using “aggressive tax planning practices which need to be looked into”.

He said that the Commission was questioning these practices and would continue to close the loopholes where necessary through legislation.


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