The government’s insistence not to withdraw the immoral tax exemption scheme published silently in The Malta Government Gazette on November 5, about which I first raised the alarm in parliament on November 8 and against which the opposition last week presented a motion to have it repealed, is yet another proof of two facts.
First, the government is arrogant.
In spite of the reaction of all stakeholders against the scheme, including the Malta Chamber of Commerce, Enterprise and Industry, the Malta Institute of Accountants, the Institute of Financial Service Practitioners, the Malta Developers Association and others, editorials in dailies and the strong objection of a well-known, genuine, Labour stalwart, the minister of finance is adamant that the measure will not be repealed or amended.
As I said, the opposition has presented a motion to challenge the legal notice. Clyde Caruana has said that he would be happy to debate the legal notice in parliament but would not withdraw the scheme. I echo the message of the Nationalist Party and ask which group of persons or businesses does the government want to favour. We will get to know which Labour Party donor will be benefitting from this obscenity.
It is not true that the government wants to promote the rule of law as this scheme discriminates against all those who pay their tax fully and on time. There are schemes that help businesses which fall behind tax payments for justifiable reasons, such as to have enough cash flow to pay wages to their employees. One can only conclude that the government has ulterior motives in coming out with this scheme and wants to favour some big donor, despite all the criticism put forward by stakeholders.
Apart from the arrogance shown by the government, this scheme is yet another proof that the government does not wish to combat money laundering seriously. In fact, I argue that the state is participating in money laundering in this country. Some may question how this could be possible.
It is not true that the government wants to promote the rule of law- Jason Azzopardi
A lot of attention is given to those who do not declare all the tax due. This is fair enough as all law-abiding citizens should declare and pay any tax due.
However, the state is giving no attention to those who overstate their tax.
Some may ask why anyone would overstate their tax due. Simple. Someone declares more than they actually earn and by so doing cleans the dirty money they have. When the government accepts such tax with open arms, it is participating in and is guilty of money laundering.
I am referring to a number of outlets around Malta and Gozo that are declaring soaring revenues, which are in no way justified by the activity they have.
Walking up and down some of the shopping streets in our country or around shopping malls, one immediately notices a number of outlets, which could be retailers or outlets operating in the catering or luxury clothes trade, and which are rather empty.
Some of these outlets are declaring revenues which do not tally with their low level of activity. They are paying VAT to the government and they are paying tax on profits. By so doing they have laundered their money. The state is happy and they are happy. And this is how the state is participating in money laundering.
I am aware that two millennia ago in Israel, two fish and five loaves were miraculously multiplied to feed thousands of hungry people by the same person who miraculously changed water into fine wine.
Apparently, our government, especially our FCID (Financial Crimes Investigations Department) and FIAU, labour under the belief that similar miraculous feats can be innocuously done by certain ‘businesses’.
If the government wants to be taken seriously when it says it wants to tackle money laundering, it should start investigating and prosecuting those who launder dirty money by overstating their income and their profits, even if they pay their tax on time.