Employers say ‘unsavoury’ Panama scandal risk to finance industry

The Malta Employers Association has said that the Maltese government is “missing out on opportunities” to defend and uphold Malta’s “financial respectability”, as the international effect of the Panama Papers starts being felt across the financial services industry.

Malta faces a strong challenge from the European Commission over an anti tax avoidance package of laws which threatens to come down hard on Malta’s system of refunding up to 85% of tax paid on dividends for non-domiciled shareholders.

The system attracts hundreds of millions in profits to Malta, which are then taxed and refunded two weeks after processing.

Finance minister Edward Scicluna yesterday appealed to MPs for a united front to defend Malta’s financial services legislation, as energy minister Konrad Mizzi fights off pressure to resign for having opened his own offshore company in Panama.

“The employment of 9,000 persons depends on a sound and professional administration of Malta’s financial Sector. It has taken years to develop this activity to the level it enjoys today, and time was required to give the sector a reputation of professionalism and serious conduct,” the MEA said in a statement.

“Our qualified and skilled legal and finance people offer a reliable service backed by an EU compliant framework of laws and regulations. At the moment what has taken years to set up is being placed at risk as Malta’s name keeps being associated, deservedly or not, with unsavoury and illicit international financial scandals.”

MEA appealed to the government to intervene and overcome the “crisis of confidence, clarity and good governance, which is not helping Malta’s social and economic progress. Employers require a stable and re-assuring environment within which to provide, and maintain, steady employment.”