Tax evasion tops agenda as Abela meets MCESD on FATF greylisting

Robert Abela asks social partners for cooperation to weed out tax dodgers and professionals who assist them

Prime Minister Robert Abela
Prime Minister Robert Abela

Under-declaration of tax dues was a major reason why Malta was placed on the greylist by the Financial Action Task Force, Robert Abela has told social partners.

The Prime Minister said government will focus its efforts to go after tax cheats and the professionals who facilitate them.

Abela was addressing a special session of the Malta Council for Economic and Social Development on Wednesday in the wake of Malta’s greylisting.

The Prime Minister insisted the government will not introduce new taxes but asked the social partners to coope“Legitimate businesses have nothing to worry about, but we cannot tolerate abusers,” he told the MCESD.

The media was allowed in for the introductory remarks. The meeting continued for almost two hours behind closed doors.

Abela said the government had signed an action plan and commitment with the FATF to address three key areas of weakness identified by the international monitors.

However, Abela would not say what the timeframes for the action plan were when asked by journalists after the meeting.

He insisted the plan was very technical and it was government’s intention to accelerate the timeframes and get back on the whitelist as quickly as possible.

Finance Minister Clyde Caruana has already ruled out October, when the FATF meets again, as the target date for getting off the greylist.

On Joseph Muscat

Asked whether he would publicly distance himself from Joseph Muscat, Abela insisted that his predecessor was no longer in government or in parliament.

The Prime Minister added that he would never justify Panama Papers.

Abela told the social partners that government will clamp down on corporate service providers that set up obscure financial structures to help clients avoid tax and launder money.

Another aspect highlighted by FATF was the need to have more accurate information on ultimate beneficial owners and sanctions against professionals entrusted with the responsibility to provide such information.

Abela said Malta had already come a long way in beefing up its register of ultimate beneficial ownership of companies but insisted abusers still exist and government will have to address this.

The Prime Minister warned that to get back onto the FATF whitelist, Maltese authorities were going to need more bite to go with their bark.

He said regulatory authorities had to be given more power and hoped that the Opposition would support proposals to allow authorities to hand out fines that until now can only be imposed by a court of law.

Another issue highlighted by FATF was the type of intelligence gathered by the Financial Intelligence Analysis Unit, especially on criminal tax evasion.

The Prime Minister said the government planned on investing more in the FIAU despite having already increased its budget tremendously.

PN leader Bernard Grech
PN leader Bernard Grech

Grech addresses MCESD

Opposition leader Bernard Grech has called on the social partners to join his call for a national task force to get Malta off the FATF greylist.

The suggestion was shot down by the government when made last week.

“Government should not ignore our call for a national effort which recognises and solves the problems we have,” Grech said told a special session of the Malta Council for Economic and Social Development on Wednesday in the wake of Malta’s greylisting.

“As outlined by the FATF report itself, Malta cannot downplay the greylist’s impact on our economy and jobs,” he said. “The time has come to call a spade, a spade.”

He also said the Opposition filed a motion in parliament calling for the FATF’s full correspondence and proposed action plan to be tabled in the House.

“We as an Opposition cannot rely solely on media reports, if we truly want to fix the situation… This is a critical moment for Malta, no rhetoric or cliché will take our country out of this dark alley,” he said.

He also said that several MCESD members have told him that government was not hearing them out when implementing decisions.

“I promise to ensure that dialogue between government and social partners is strengthened,” he said. “As leader of the Opposition and as part of the PN, we are here to continue meeting with you individually and collectively to ensure that the dialogue is truly carried out.”

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