Updated at 3.29pm with Bernard Grech's comments.
Tax dodgers, money launderers and the professionals who facilitate them will be targeted in the government’s plan to overcome financial greylisting, Prime Minister Robert Abela told social partners on Wednesday.
Addressing a special meeting of the Malta Council for Economic and Social Development, Abela said that serial under-declaration of tax dues was a major reason why Malta had been placed under enhanced monitoring by the Financial Action Task Force earlier this month.
While insisting that the government would not be introducing any more taxes, Abela said that it was not right that bone fide businesses paid their social contributions while others skimmed their declarations or, even worse, avoided paying taxes altogether.
"Legitimate businesses have nothing to worry about, but we cannot tolerate abusers," he told social partners.
He said that the government had signed an action plan and commitment with the FATF to address three key areas of weakness.
Tax dodgers targeted
The first commitment was to clamp down on tax dodgers and the systems used to launder those illicit ‘savings’.
Malta’s action plan, Abela said, would also see the government clamp down on corporate service providers that set up obscure financial holdings used to avoid taxes and launder money.
On this area, Abela said the government needed the MCESD’s help.
“We cannot do this without your cooperation and that of your members,” he said.
The MCESD is an advisory council that brings together representatives from government, top sector lobby groups and the country’s largest unions.
Malta has already come a long way in beefing up its register of ultimate beneficial ownership of financial structures, however abusers still exist, he said. The register is one of the key areas the FATF said Malta would need to address.
Abela told the social partners that to get back onto the FATF white list, Maltese authorities were going to need more bite to go with their bark.
Giving regulators more power
The prime minister said he hoped the Opposition would now support a government proposal to allow regulatory authorities to hand out fines that can currently only be imposed by a court of law.
That legal amendment had stirred controversy when the government first tried to pass it, drawing resistance from legal professionals and the Opposition, who described the move as anti-constitutional.
Abela said the matter was one of the issues the government had committed to addressing with the FATF.
Beefing up the FIAU
The third and final area that Malta had committed to address, is the way intelligence is gathered and shared among law enforcement and regulatory bodies.
Abela said that this ball was in the government’s court.
Investment in the Financial Intelligence Analysis Unit, which compiles secret reports on suspected financial crime, had increased 20-fold in the past decade, Abela said.
However, the government was planning on investing more in the coming months.
Abela said “partisan games” would only make the process to get back into the white list longer and more difficult, and urged MCESD members to pull the same rope in the best interest of the country.
Join our call for national task force, Grech tells social partners
Opposition leader Bernard Grech meet the social partners later on Wednesday.
He said that the country was at a delicate crossroads.
“It is clear that many are concerned about what greylisting means for the country,” he said.
Many, he said, feared the country’s economy would suffer as a consequence.
Every day on the grey list would negatively impact foreign direct investment into the country.
The PN, Grech said wanted to rise above petty politics, and had invited the government to join forces for a national taskforce to introduce the necessary changes to be put back on the white list.
If the steps taken so far have failed, then a new direction must be needed, he said.
Grech ended by inviting the MCESD members to join in the PN’s call for a united front in the country’s efforts to overcome greylisting.