‘Will New Tax Regime Impact Citizens’ Standard Of Living?’ PN’s Shadow Finance Minister Questions
New PN finance spokesperson Jerome Caruana Cilia has questioned whether a proposed revamp to Malta’s corporate taxation system will ultimately result in citizens getting poorer.
“Having line of sight of and understanding the changes to the corporate tax regime recently alluded to by the Minister of Finance is important from a communications perspective, a political aspect, a nationwide revenue generation angle,” Caruana Cilia told a taxation conference today in what was his first formal address in his new role.
“Most importantly, if these changes reflect a shift in position which impacts our citizens’ way of life and standard of living due to any knock-on effect, these changes need to be brought out into the open at the earliest possible moment.”
“Any further downturn in standards of living will have far-reaching social besides economic effects.”
Finance Minister Clyde Caruana
Finance Minister Clyde Caruana last week pledged to overhaul Malta’s corporate taxation system, which allows shareholders of foreign businesses to benefit from extremely low tax rates on shareholder dividends though a full imputation system.
“The name of the game has changed… we must be competitive but the system must also be fair,” Caruana explained.
“We know what is happening in the world and the industry’s key players have all come to terms with the fact that there must be a change in our tax regime. The reform is being carried out by practitioners themselves, while the government is facilitating the process.”
This was a reference to the European Commission’s recent proposed directive to set an effective minimum corporate taxation rate of 15% for large multinational groups, in line with a principle agreed upon by the Organisation for Economic Co-operation and Development (OECD).
Caruana didn’t confirm whether businesses will end up having to pay more tax but said that details of this new system will be announced in an upcoming consultation document.
Arguing that the government should have consulted with the Opposition before taking a decision on this new system, Caruana Cilia said the PN will hold a series of stakeholder meetings in this regard.
“On such sensitive and critical policies for our country, there always was close collaboration between government and Opposition. As the Opposition we continue to believe that critical decisions to transform our tax regime are to take place after proper public consultation with all stakeholders.
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