Defaulting taxpayers will be rewarded with an amnesty under an exemption from tax of property transfers outlined in a new legal notice, several crucial bodies have warned.
In separate statements, the Malta Insitute of Accounts, the Malta Institute of Taxation and the Institute of Finacial Services Practitioners said the new measure goes against Malta’s battle to get off FATF’s grey list.
“This measure is tantamount to a tax amnesty and is a slap in the face to all professionals and entrepreneurs who operate their business in full compliance with legal and ethical considerations, while rewarding defaulters who abusively failed to pay their dues towards society,” MIA said.
“This Legal Notice risks derailing the country’s efforts on one of the most pressing issues for the country, notably its commitment, both nationally and to the international community, to fight tax crimes. By rewarding defaulters that have abusively failed to abide by legal requirements, Malta is risking undermining the progress the country is seeking to make in this regard.”
Through Legal Notice 419 of 2021, taxpayers will be able to offset tax payable on property transfers against their existing tax arrears, among other things.
“Any amnesty or other prescribed or conventional mechanism which effectively rewards defaulting taxpayers, is patently inequitable and should not be entertained, much less promulgated and implemented, in a modern and mature democracy,” the institutes said.
If at all possible, the injustice inherent in this specific amnesty is all the more nefarious insofar as the Rules apply selectively by favouring defaulting taxpayers who own immovable property situated in Malta – acquired on or prior to 31st March 2021 – and who choose to dispose of such property prior to 31st December 2022.”
“Since Malta was grey-listed earlier this year, both the Malta Institute of Taxation and the Institute of Financial Services Practitioners have been actively participating in and contributing to national efforts to procure Malta’s removal from the grey list.”
“In the opinion of the institutes, the publication of the Rules is not helpful in this regard. The lack of any prior consultation in connection with the Rules and the Government’s failure to explain the underlying rationale or justification for their introduction is regrettable.”
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