European Parliament president Roberta Metsola has sounded a warning over Malta’s corporate tax rate, advising Malta to “look further at what makes it truly attractive”.
Speaking at the Institute of Financial Services Practitioners annual conference, Metsola said that Malta should be one of the leading countries spurring discussions on a global tax rate.
Malta’s tax rebate to foreign companies will be a leg we can stand on only for a little while longer, she warned.
Malta has one of the highest statutory corporate tax rates in the world, taxing 35 per cent of end-year company profits.
However, the country attracts foreign investment by offering overseas companies a series of rebates and benefits that allows them to bring their corporate tax rate down to an effective five per cent.
Malta’s ability to offer competitive tax rates however is in doubt as the country is expected to be forced to adopt a global minimum tax rate imposed by the Organisation of Economic Cooperation and Development.
Speaking to financial practitioners on Thursday, Metsola highlighted the need for Malta to do away with the negative stereotypes attributed to low-tax jurisdictions in order to give credibility to the financial sector and ensure the effectiveness and efficiency of the judicial system.
Metsola also emphasised the need for long-sighted investment following what she described as short-termism over the last decade. The Labour Party has been in power for nine years.
“It was economic, political and security short-sightedness to create an economic sphere of activity based on selling passports," she said.
Metsola said the controversial passports scheme was like selling the family silver and had put Malta in direct confrontation with Europe.
She also spoke about the challenges facing Europe. Fresh from the ravages of the pandemic, Europeans are faced with the consequences of the Russian invasion of Ukraine.
She said the economic sanctions intended to hurt Russian President Vladimir Putin will also hurt all of Europe. She appealed to every member state to be prepared and not wait for the storm to hit.
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