Finance Minister insists EU should have studied impact of tax changes

Speaking at an ECOFIN meeting of EU Finance Ministers in Brussels today, Finance Minister Edward Scicluna, expressed disappointment that the proposed Anti-Tax-Avoidance Directive was not accompanied by an impact assessment which would have indicated the effect on Member States and also on the EU as a whole.

This, he added, was even more important in the eventuality of lack of progress on the OECD’s base erosion and profit shifting deliverables (BEPS) in third countries.

Scicluna that the reasons put forward in the Commission’s report for not having such an impact assessment were not satisfactory.

In absence of such a report, the Maltese government is therefore commissioning an impact assessment for the country.

Scicluna said that if the Council really wanted  to make rapid progress it should focus on blatant cases of tax evasion and not interfere with domestic issues with little or no effect on BEPS.

“Malta is supportive of measures which are aimed at preventing corporate tax avoidance,” he said, cautioning that certain elements in the corporate tax package go beyond what is necessary to prevent abuse and to achieve this objective.

He also drew attention to the risk which some aspects of the proposal could have on the competitiveness of the EU and its Member States.

In conclusion, Scicluna told the meeting that the Council’s experience with the FTT has shown that it would be more important to direct the Council’s effort on “quality” work rather than just “haste”.

During the Council meeting Finance Ministers also discussed, amongst others, measures to prevent terrorist financing; the state of play on the implementation of the Banking Union and adopted Budget Guidelines for 2017. In connection with the financing of terrorism item, Minister Scicluna noted Malta’s support for an action plan issued by the European Commission on 2nd February 2016, underlining the importance of achieving rapid progress on the legislative proposals which were made.

Scicluna was accompanied by Marlene Bonnici, Permanent Representative of Malta to the EU, and Alfred Camilleri, Permanent Secretary within the Ministry for Finance.