Malta scores well in IMF fiscal transparency analysis

Malta has “many elements of sound” fiscal transparency practices, according to an assessment carried out by the International Monetary Fund.

The evaluation was requested by the Maltese government and was carried out by the IMF last May.

Torben Hansen, deputy division chief of the IMF’s fiscal affairs department, said that Malta met the standard of good or advanced level practice in 21 of the 35 principles in the IMF’s fiscal transparency code.

The country also met the basic practice on a further 12 principles.

The IMF identified some areas for improvement, including the need for a fiscal report that provided a consolidated view of the performance of extra budgetary units like agencies, the university and MCAST.

It also noted that tax expenditures – the loss in revenue from tax exemptions and tax cuts – had to be “more comprehensively reported”.

The report was released on Thursday afternoon at a press conference in Malta delivered by Hansen and Finance Minister Edward Scicluna.

The technical assessment delved into the manner by which Malta reports its fiscal results, forecasts and risk evaluations.

The IMF made seven recommendations, which Scicluna said would be taken on board.

“It is good that as a country we are peer reviewed because it benchmarks us with other countries and helps identifies our weaknesses… Malta compares very well with the EU average,” Scicluna said.

IMF recommendations

Fiscal reporting

• Gradually expanding the institutional coverage of fiscal reports to the public sector
• Publishing a regular report on tax expenditures

Fiscal forecasting and budgeting

• Presenting more comprehensive information on extrabudgetary units and performance information in the budget documentation
• Harmonising and consolidating presentations of macroeconomic and fiscal forecasts in different reports
• Strengthening the framework for reporting on and managing public investment

Fiscal risk analysis and management

• Publishing an annual fiscal risk statement that discusses the size and nature of specific fiscal risks, and measures to mitigate these risks
• Establishing centralised oversight arrangements for public corporations based on a common ownership policy and performance monitoring cycle