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James Debono
Back in 2003, when the second investment registration scheme was launched the government insisted that this was the last chance for Maltese residents to regularise their undeclared investments outside the country. Not withstanding this earlier commitment the government has recently decided to give these investors one more chance to regularise their position.
The Malta Financial and Business Times asked Parliamentary Secretary Tonio Fenech what prompted such an apparent reversal of policy.
Fenech insisted that the government’s decision to extend the investments registration scheme for Maltese residents to June 16 was taken in the light of the fact that the European Union's Savings Tax Directive will come into force on July 2005 rather than in January 2004 as previously thought.
This directive regulates income earned from savings and other funds held abroad. Under the directive, there will either be an automatic exchange of information between countries or a withholding tax on the interest accruing from funds in the country where the savings are kept.
When a similar scheme was launched in 2003, the than Finance Minister John Dalli had insisted that this was the last time the government was giving a chance to Maltese residents with unregistered funds abroad, to regularise their position. Asked whether the government’s decision to give another chance to those with unregistered funds abroad, was a reversal of an earlier government policy not to give another chance to those with unregistered funds abroad, Fenech insisted that “the previous scheme was also introduced in the light of the coming in to force of the Savings Tax Directive. At that time our impression was that this directive would be introduced by January 2004. Since certain countries outside the EU had procrastinated, ECOFIN postponed the introduction of this directive first to January 2005 than to July 2005. This will be the final date. This is the reason why the government has decided to give one final chance to those with unregistered funds abroad.”
Tonio Fenech also excluded any link between this particular decision and the Central Bank’s decision to increase interest rates in order to contain the capital outflow from the country’s reserves.
Asked whether the government has any estimates on the amount of unregistered funds abroad Fenech said that when the directive is implemented in July the government would have a full picture. “More than Lm 400 million had been declared in previous investment registration schemes.”
In an investment registration scheme in September 2001, the global value of assets or foreign investments registered amounted to Lm291.5 million, Lm55.1 million of which were repatriated. The scheme was extended for a restricted period between September 1 and November 15, 2003. The global registration under this extension was Lm132.5 million
In September 2001, when the first scheme was launched former Finance Minister John Dalli had estimated there are over Lm1bn invested abroad by Maltese, money that has not been declared.
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