Scicluna: ‘tax should be business-friendly for micro enterprises’

Finance minister Edward Scicluna said the government remained committed to ensure that tax is as business-friendly and streamlined as possible to facilitate and attract investment.

Addressing the MIM Malta International Taxation Conference on latest developments in international tax law, Scicluna emphasised the importance of boosting Malta's attractiveness for both local and foreign enterprises.

"We are looking towards streamlining the tax system in a manner as to make it less cumbersome, especially with regard to micro enterprises and SMEs.

"Small enterprises are the lifeblood of our economy, and we need to ensure that Malta is well positioned to encourage them, and their counterparts in other countries, to invest in Malta," Scicluna said.

Scicluna also emphasised the importance of further nurturing and developing specialised education. "Malta needs to be more open to certain specialisations and not be afraid of enabling certain professions to specialise even further. The role of the traditional 'general practitioner' is diminishing in today's world."

He noted in particular that the financial services industry will be one of the main drivers in Malta's growth in the coming years, and in order to increase Malta's attractiveness, the Government would be working to further decrease the level of unnecessary bureaucracy and timeframe of response.

In another address to the Society of Trust and Estate Practitioners (STEP), Scicluna also said the improvement of existing rules for Malta's financial services centre, were necessary to maintain a high level of integrity. 

"The amendments being proposed to the Trust and Trustees Act are aimed at achieving a balance between making Malta a more attractive trust domicile, through the introduction of new features such as the concept of family trusts, whilst ensuring that the necessary safeguards are in place through the re-enforcement of the relevant regulatory regime," Scicluna said.

Bill No. 32, proposing a number of amendments to the Trusts and Trustees Act, was published on the 24th December 2013 and is currently awaiting the second reading in parliament.

Another initiative is the publication of the final regulations implementing the Foreign Account Tax Compliance Act, known as FATCA, an agreement which was signed between the United States and a number of leading countries, including Malta.

A development expected to have an impact on trust service providers is that relating to the proposed register of beneficiaries, which is being proposed as part the draft legislative proposal for the Fourth Anti-Money Laundering Directive published by the of the European Commission published in February last year.

"It is evident that such wide-reaching initiatives will have an impact on the way the community of finance practitioners operates and that is why broad engagement in the process of formulation of these structures and the rules that will govern them is so important," Scicluna said.

"Malta does, of course, face big challenges; it would be imprudent to think otherwise. However, getting the structures and infrastructure right and ensuring that they fulfil their roles is essential to ensure that Malta continues on the road of prosperity."