A very peculiar ‘amnesty’

Legal Notice 419, entitled ‘Exemption from Tax on Property Transfers (Set-off of Tax Arrears) Rules, 2021’ provides that persons who have tax arrears can set off those arrears by transferring tax due on property transfers.

The amnesty is only applicable to those who have tax arrears in case of transfers of immovable property subject to tax under Article 5A (default 8% tax on the transfer value of the property) of the Income Tax Act and which was originally acquired before 31 March 2021 and which is transferred by the 31 December 2022.

This unusual step was lambasted by Malta Institute of Taxation and the Institute of Financial Services Practitioners, saying that any amnesty which effectively rewards defaulting taxpayers is patently inequitable and should not be implemented. In a separate statement, the Malta Institute of Accountants also criticised the measure which it said is “tantamount to a tax amnesty” and “a slap in the face” to all professionals and entrepreneurs who operate their business in full compliance with legal and ethical considerations. The Malta Chamber of Commerce also objected to the amnesty which it labelled ‘unfair’, while the Malta Developers Association disassociated itself from the measure.

Describing the amnesty as discriminatory, the Opposition is taking the unusual step of challenging the legal notice in parliament.

A tax amnesty is normally given when there is a large number of people who are in an uncomfortably illegal position and the government itself would benefit from it in the long run – such as when amnesties were given to all those who had undeclared amounts of money deposited abroad.

In this case the so called ‘amnesty’ only benefits a few and does not cover all those who have tax arrears.

As a press release issued by the PN states, “no distinction was made between those who may have raked up arrears because of temporary problems beyond their control and other ‘less genuine’ cases.”

Let us compare two cases: A (person or a company) works solely as a developer and as a result of all sales being subject to withholding tax, A has no tax arrears. B has various commercial activities that include development of property. When A sells a property, A is charged withholding tax; but when B does the same, the withholding tax is set off against tax arrears, while the sale of the property is not really taxed in any way.

And what about C who owes substantial tax arrears but has no property to sell?

The discriminatory nature of this peculiar amnesty cannot be clearer. I don’t think it is a genuine amnesty really, because it gives a free ride to some and not to others.

Like many others, I had thought that with the appointment of Clyde Caruana as minister responsible for finance, the country had turned a new page and started to consider taxation and tax evaders in a serious, sensible and logical way. Not so, it seems.

Whoever concocted this so-called amnesty must have forgotten that Malta was grey-listed by FATF and that so many international bodies are monitoring our taxation system. Or do they think that these bodies are only interested in our taxation system that lures foreigners to Malta when it is in competition with other countries?

Does the government believe that those who are monitoring our financial system couldn’t care less in areas where only taxation of Maltese people is regulated? So we must have a serious taxation regime for foreign investors... but they don’t mind a charade in the case of tax paid by the locals? Even if all foreign monitoring bodies have this mentality – which I seriously doubt – surely the government of Malta should avoid raising the hackles of Maltese businessmen in this way.

The suspicion arises, therefore, that this ‘amnesty’ was made for the benefit of a few bażużli – the chosen ones who are in the good books of Robert Abela’s government. Actually, it is very difficult not to believe otherwise, even though I have no inkling of who these might be.

The elephant in the dock

The petitioner in the most important animal rights case of the 21st century is Happy, an elephant in her 50s, living in her enclosure in New York City’s Bronx Zoo. After a lifetime spent in captivity, separated from her family and again and again from her closest companions, Happy is getting her day in court.

She was born in Thailand during the Vietnam War, captured, locked in a cage, trucked and loaded onto a 747 that crossed the Pacific until it landed in the United States. She spent her earliest years in Florida, not far from Disney World, before she was shipped to Texas. In 1977, when she was 5 or 6, she was hauled onto another truck and shipped to the Bronx Zoo in New York.

In the wild, barely weaned, she’d have been living with her family – her sisters, her cousins, her aunts, and her mother – touching and nuzzling and rubbing and smelling and calling to each other almost constantly.

Instead, after she landed at the zoo and for years after, she gave rides to the schoolchildren of New York and performed tricks, sometimes wearing a blue-and-black polka-dotted dress. Today, in her 50s and retired, she lives alone in a one-acre enclosure in a bleak, bamboo-shrouded Bronx Zoo exhibit ironically called ‘Wild Asia.’

The New York Court of Appeals will soon consider whether her continued detention is unlawful. Lawyers have filed a habeas corpus petition for Happy, arguing that she deserves legal personhood. That premise may sound weird – until one considers that U.S. law recognizes both corporations and ships as persons.

A “person” is something of a legal fiction. Pro-life activists have argued that embryos and foetuses are persons. Some forms of artificial intelligence might one day become persons.

But can an elephant be a person? No case like this has ever reached so high a court, anywhere in the English-speaking world. The elephant suit might be a strange case, but it is by no means frivolous.

It raises the question about the relationship between humans, animals, and the natural world and concerns the future of life on Earth.

These are questions that existing laws are not able to address.