The golden handshakes must be transparent

It has been reported, in various sections of the press, that Justyne Caruana, former Minister of Education, has received, or will be shortly receiving payment in the region of €30,000 as a result of her ceasing to hold political office. This has occurred after she was forced to resign subsequent to the publication of a damning report from the Commissioner for Standards in Public Life which report concluded that the Ministry of Education, under her political direction, had screwed the exchequer to benefit her “close friend”.

Since 2008 holders of political office who cease to occupy such office have received golden handshakes, substantial sums which some describe as severance pay. The sums disbursed to date are substantial and, over the years, are said to be close to a total of €1,500,000. Holders of political office in receipt of such payments are not just members of Cabinet, as payments have also been made to former Leaders of the Opposition throughout these years.

The applicable criteria are largely unknown. There is no transparency whatsoever in the process.

There is a serious issue of governance.  The Executive is bound to be accountable through ensuring that both the criteria applied as well as the monies disbursed are well known. It is an expenditure from the public purse, so there should be no secrets about it. It is in the public interest to know how the public purse is being managed at all times.

First: the objectives of the payments should be crystal clear. When holders of political office take up their post, generally, they take leave from their current employment or close their private offices if they are professionals. Their job prior to assuming political office may be lost by the time they relinquish office. On the other hand, losing contact with their professional environment will generally place them in a difficult position to reintegrate when their term of political responsibilities draws to an end. 

Hence the objective of these so-called golden handshakes is to compensate for the fact that the holder of political office cannot go back to his/her former job or professional environment. He or she will generally have to start from scratch or almost. Not all cases are identical and hence the criteria drawn up should allow for some leeway. Do they? We do not know as to date these criteria are considered as some state secret!

The objective of the payments made is to ease the transition of the holder of political office back to a normal life.

The second point is to establish who should apply these criteria. From what is known through reports in the media the matter is regulated by the Office of the Prime Minister (OPM), either directly or through the Cabinet office. This is not on.

Ideally the criteria should be applied by an authoritative person or body separate and distinct from the OPM. The OPM has a finger in the pie, generally, in all the circumstances leading to the appointment to political office or to the dismissal therefrom. It should therefore not be in a position of sugaring resignations with promises of generous hand-outs.

The third point is then to establish the quantum payable.

From what is known, locally, this is established at a month’s salary for every year’s service, subject to a minimum payment of a six-month salary. It is not known whether eligibility is pegged to a minimum period in office.  These payment rates are substantial when compared to those in other jurisdictions. In addition to having smaller payments other jurisdictions subject such benefits to a minimum period in office, generally of not less than one year.

There are also a number of other serious considerations which need to be made. Should loss of political office as a result of an unfavourable election result have the same impact as being dismissed from office or being forced to resign as a result of unethical or unacceptable behaviour?

Specifically, should ending your political appointment in disgrace be rewarded? It should definitely not be so.

These are some of the issues which transparency brings to the fore. We need to discuss them seriously and only then can they be applied ethically and fairly.

It is for these reasons that earlier this week I have requested the Auditor General to investigate the golden handshakes being paid out by the Office of the Prime Minister to former members of the Cabinet. The payments made and the criteria applied should be examined meticulously.

Good governance should be our basic guide.

published in The Malta Independent on Sunday: 9 January 2022

Ħlasijiet kbar: trasparenza xejn

Għadni kif ktibt lill-Awditur Ġenerali fejn talbtu jinvestiga x’inhu jiġri dwar il-ħlasijiet enormi li qed isiru lill-Ministri u Segretarji parlamentari li jispiċċaw mill-ħatra.

Il-kriterji li qed ikunu applikati m’humiex magħrufa. Ma hemm l-ebda trasparenza dwar x’inhu jiġri.

It-talba li bagħatt hi s-segwenti:

“Nikteb biex nitolbok tinvestiga l-ħlas ta’ “golden handshakes” lill-membri tal-Kabinett li jispiċċaw mill-ħatra. Presentment fl-aħbarijiet hemm il-każ ta’ Justyne Caruana imma għad kif kellna ukoll il-ħlasijiet li saru lil Rosianne Cutajar.

Ma hemm l-ebda trasparenza dwar il-ħlasijiet li saru u li qed isiru lill-Ministri u Segretarji Parlamentari, uħud minnhom għal darba tnejn.

Nitolbok għaldaqstant tinvestiga xi kriterji qed ikunu użati biex isiru dawn il-ħlasijiet kif ukoll li teżamina l-ħtieġa li jkunu introdotti mekkaniżmi effettivi ta’ kontroll u verifika dwar dan il-proċess kollu.”

Regulating lobbying

When Parliament, some years back, approved the Standards in Public Life legislation it did not arrive at any conclusions on the regulation of lobbying. It postponed consideration of this important matter by delegating the matter to the Commissioner for Standards in Public Life – then still to be appointed. The Commissioner had to draft a set of lobbying guidelines.

It is now almost two years since the publication by the Commissioner for Standards in Public Life of a consultation document entitled “Towards the Regulation of Lobbying in Maltain which document Dr George Hyzler, the Commissioner, outlines his views as to how lobbying should be regulated in Malta.

The Office of the Commissioner for Standards in Public Life has requested technical support from the EU’s Directorate General for Structural Reform in the area of “public integrity”. A technical support team from OECD engaged by the EU is currently in Malta to assist and advise the Office of the Commissioner for Standards in Public Life.  I have had the opportunity of a very fruitful discussion with one of the OECD lobbying experts earlier during the week.

Hopefully in the weeks ahead the Commissioner will be in a position to submit a clear proposal indicating the way ahead for regulating lobbying in Malta.

In his consultation document of two years ago the Commissioner rightly emphasises that due to the particular circumstances of the country, the small size of the country and the population in particular, decision-takers are easily accessible. This leads to the conclusion that there is limited need to regulate the professional lobbyist. Rather, opines the Commissioner, there is a need to address contacts between decision-takers and private individuals who have such easy access.

The Commissioner makes the point that this should be done carefully without obstructing or hindering the direct contact between the politician as decision-taker and the voter at constituency level. This is a valid point but not without its dangers and pitfalls. At constituency level democracy is strengthened. It is also where clientelism is carefully nurtured. This is also a basic characteristic of this small country.

Lobbying is about influencing the decision-taker. It is perfectly legitimate for any citizen, group of citizens, corporations or even NGOs to seek to influence decision-taking. This is done continuously and involves the communication of views and information to politicians, parliamentarians and administrators by those who have an interest in the decisions under consideration.  

Hence the need for lobbying to be transparent and above-board. This is normally done through ensuring that meetings held by holders of political office or senior administrators are well documented and that the resulting minutes and supporting documents are available for public scrutiny.

Formal lobbying would be thus addressed. But that leaves informal lobbying which is the real headache. This can only be regulated if those lobbied are willing to submit themselves to the basic rules of transparency. Self-declarations by those lobbied would in such circumstances be the only way to keep lobbying in check!

This is however not all.

There are more sinister ways through which lobbying is carried out. Well organised sectors of industry and business employ former decision-takers as advisors or in some other high-sounding senior position. This ensures that the “advisor” can share his knowledge and contacts with his “new employer” thereby facilitating the effectiveness of focused lobbying. This practice is normally referred to as “revolving-door recruitment” and is an integral part of the lobbying process which needs regulating the soonest.

There are countless examples of this practice both locally and abroad, in respect of which I have already written various times. This aspect tends to be regulated by establishing a reasonable time-frame during which the former decision-taker or administrator cannot seek employment in areas of economic activity in respect of which he had political or high-level administrative or regulatory responsibilities.

The regulation of lobbying is essential in a democracy. Unregulated, lobbying can, and generally does, develop into corruption.

Lobbying can be a legitimate activity. Adequate regulation of lobbying, properly applied, ensures that it remains within legitimate boundaries.

Published in the Malta Independent on Sunday: 28 November 2021

Il-kontabilità tan-negozji u l-korporazzjonijiet pubbliċi

Illum indirizzajt il-konferenza biennali tal-Malta Institute of Accountants bit-tema: A New Mindset: Reduce. Reuse. Report.

Fl-Unjoni Ewropeja bħalissa għaddejja diskussjoni dwar Direttiva biex kumpaniji diversi jkollhom l-obbligu li jissottomettu rapporti regolari dwarl-impatti tagħhom fuq is-soċjetà. Dawn ir-rapporti jikkonċernaw dak li jissejjaħ “non-financial reporting” u allura jittrattaw dwar impatti ambjentali, impatti soċjali kif ukoll l-attitudnijiet etiċi fil-kumpanija.

Id-diskussjonijiet għadhom għaddejjin. Hu tajjeb li anke aħna niddiskutu dan kollu u kif ser jeffettwa lilna u lill-kumpaniji li joperaw fil-pajjiż.

Emfasizzajt li hu importanti lil-pajjiż ma jfittix xi eżenzjoni minn din id-direttiva. Huwa importanti ukoll li l-korporazzjonijiet tal-Gvern ukoll ikunu kostretti li jippreżentaw dawn ir-rapporti.

Bħal dejjem hemm problema bl-SMEs (Small and Medium Sized Enterprises) li waħda waħda jqisu lil-impatt tagħhom hu żgħir imma li meta tgħoddhom flimkien jammonta għal impatt sostanzjali! Dawn ukoll jeħtieġ lijinstab mod kif jirrappurtaw dwarl-impatti tagħhom. Biex jagħmlu dan ikollhom bżonn l-għajnuna tal-Gvern, kemm għajnuna diretta lilhom kif ukoll lill-assoċjazzjonijiet li jgħinuhom.

Ir-rappurtaġġ li ser teżiġi l-Unjoni Ewropeja hu applikazzjoni tal-prinċipju ta’ trasparenza fuq in-negozju ul-industrija. It-trasparenza hi l-bażi li mingħajrha ma jistax ikollna kontabilità vera.

Għandna kull dritt li nkunu nafu x’inhu jiġri anke fil-kumpaniji u fil-korporazzjonijiet pubbliċi. Mhux il-politiċi biss għandhom jagħtu kont ta’ egħmilhom: anke l-kumpaniji u l-korporazzjonijiet pubbliċi!

Id-diskors kollu taqrah hawn.

Min jitwieled tond, ma jmutx kwadru

Uħud ma kienux qed jistennew li Malta tiżdied fuq il-lista l-griża tal-Financial Action Task Force (FATF).  Il-kitba, iżda, ilha fuq il-ħajt għal bosta żmien. Sfortunatament il-linġwaġġ tal-governanza tajba ma jinftiehemx minn kulħadd. B’mod partikolari, min l-unika valur li jifhem fih hu dak tal-flus, ftit li xejn ser jifhem u jagħti kaz.  

Uħud donnhom jgħixu kontinwament fid-dellijiet. Donnhom jippreferu li jinsatru fid-dell tal-kważi anonimità. It-taħwid f’dan it-tip ta’ ambjent hu ferm iktar faċli.

Skond rapporti fil-media, l-awditur intern tal-Awtorità tal-Artijiet,  Charlene Muscat, qed tingħata l-ġemb u ġiet miżmuma milli taqdi r-responsibbiltajiet tagħha. Qed jingħad li dan ilu jseħħ numru ta’ xhur.  Wara li ħejjiet rapport kritiku dwar ħidmet l-Awtorità tal-Artijiet issa ser tispiċċa trasferita x’imkien ieħor fis-servizz pubbliku.  

Charlene Muscat, li kienet ġurnalista mal-One kif ukoll hi ex-Sindku Laburista tal-Imqabba kienet impjegata biex tiffaċilita l-governanza tajba fl-Awtorità tal-Artijiet u dan billi tagħmel il-verifiki interni ta’ ħidmet l-awtorità.  Ġiet miżmuma milli tagħmel xogħolha billi, fost oħrajn ma tħallietx tattendi laqgħat tal-Bord u nżammilha aċċess għall-files meħtieġa biex tagħmel xogħolha. Fi ftit kliem xi ħadd iddeċieda li xogħol l-awditur intern ma kienx iktar meħtieġ. Nifhem dan xi jfisser għax dan għaddejt minnu jiena ukoll f’ċirkustanzi oħra xi żmien ilu.

Dan hu eżempju ieħor ta’ Gvern li jgħid ħaġa u jagħmel oħra: jikkuntrasta ma dak kollu li ntqal dwar il-posizzjoni ta’ Malta fuq il-lista l-griża tal-FATF. Il-Prim Ministru Robert Abela ilu jxerred id-dmugħ tal-kukkudrilli dwar kemm Malta ġiet ittrattata ħażin meta tqegħdet fuq din il-lista l-griża, għax ma ħaqqiex hekk. Imbagħad, fl-istess ħin il-Gvern tiegħu stess jirresisti proċessi ta’ verifika trasparenti, tant essenzjali biex tkun assigurata governanza tajba.  Mingħajr  governanza tajba, trasparenza u kontabilità, ftit hemm ċans li neħilsu minn posizzjoni fuq il-lista l-griża!

L-Awtorità tal-Artijiet twaqqfet ftit wara li tfaċċa l-iskandlu Gaffarena, bħala rimedju għat-taħwid li kien tfaċċa dakinnhar. Għad hemm lok għal bosta spjegazzjonijiet anke dwar dan, għax il-ħolqien tal-Awtorità jidher li ma solviet xejn, għax min jitwieled tond, ma jmutx kwadru.

Dak li kien CEO tal-Awtorità tal-Artijiet, James Piscopo, kien warrab mill-kariga tiegħu ftit inqas minn sena ilu. Il-kuntratt tiegħu ma kienx ġie mġedded, u dan meta bdew jissemmew numru ta’ allegazzjonijiet serji fil-konfront tiegħu.  Kien intqal li t-taqsima tar-reati ekonomiċi fil-korp tal-Pulizija kienet qed tinvestiga numru ta’ transazzjonijiet offshore. Investigazzjoni kumplessa li jekk u meta tkun konkluża setgħet possibilment titfa’ dawl fuq  bosta ħwejjeġ. Dak li kien skrivan mal-Air Malta għad hemm bosta ħwejjeġ x’jispjega!

Iil-qarrejja bla dubju jiftakru x’għadda bejn is-sidien tal-Lukanda Fortina u l-Awtorità tal-Artijiet. Kif art pubblika li oriġinalment ngħatat b’kundizzjonijiet favorevoli għat-turiżmu spiċċat tiġi sviluppata b’mod spekulattiv għal ufiċċini u appartamenti. Żvilupp li qed iwassal għal qliegħ ta’ miljuni, a spejjes tal-kaxxa ta’ Malta. S’issa għad mhux ċar kif dan seħħ u min kien responsabbli biex ippermettieħ. L-Awtorità tal-Artijiet għad trid tispjega x’ġara eżattament.

Fid-dell, kważi mistura, hemm numru ta’ interessi kummerċjali marbutin flimkien. Interessi li nifhem li bdew ifeġġu fuq l-iskrijn tal-komputer ta’ dik li kienet l-awditur intern tal-Awtorità tal-Artijiet. L-ispjegazzjonijiet iżda qatt ma ngħataw.

Meta nħolqot l-Awtorità tal-Artijiet, flok dak li kien id-Dipartiment tal-Artijiet, kien intqal b’ħafna pompa li ser tiddaħħal iktar serjetà fl-amministrazzjoni tal-art pubblika. Ma kienx ser ikollna iktar “King tal-Lands”, għax kollox kien ser jgħaddi f’idejn ir-Repubblika!  Fir-rapporti annwali tal-Awtorità tal-Artijiet hu emfasizzat li din hi mibnija fuq prinċipji sodi: fuq sens ta’ ġustizzja, kontabilità u trasparenza. Probabbilment li dik li kienet awditur intern ma taqbel xejn ma dan!  

ippubblikat fuq Illum: il-Ħadd 4 ta’ Lulju 2021

Old habits die hard

Malta’s grey-listing by the Financial Action Task Force (FATF) may have caught some on the wrong foot.  The writing, however, has been on the wall for some time. The language of good governance does not have any meaning or significance to those who appreciate values only within the context of the skills required to handle a bank account.

Unfortunately, lurking in shadowy grey areas has been a favourite past-time for some, where they consider themselves as being quite at home.

According to reports in the media, the Internal Auditor at the Lands Authority, Charlene Muscat, has been side-lined, prevented from carrying out her duties and responsibilities for a number of months. She is now being redeployed elsewhere in the civil service. This follows her critical report on the Lands Authority.

Charlene Muscat, a former One TV reporter and former Labour Mayor of Mqabba was employed in order to ensure that proper internal checks and balances are in place thereby facilitating good governance at the Lands Authority. She has been obstructed from doing her work properly by being prevented from attending board meetings, and from having access to files. In a few words, someone, somewhere made sure that the Internal Auditor is rendered useless and ineffective. I have a personal understanding of what this means and feels, having been through it myself elsewhere.

This is another example of the double-talk of government and comes hot on the heels of the FATF grey listing. The Prime Minister Robert Abela whines and whinges about Malta’s grey-listing by the FATF, shedding many crocodile tears in the process. However, at the same time, his own government actively resists the implementation of transparent internal auditing processes, a basic prerequisite for good governance. Without good governance, transparency and accountability we will never get rid of grey-listing.

Set up in the wake of the Gaffarena scandal, the Lands Authority has quite a lot of pending explanations, as apparently, old habits die hard!

Former Lands Authority Chief Executive James Piscopo stepped down from his role less than a year ago after his contract was not renewed in the wake of a number of serious allegations in his regard.  The economic crimes unit is apparently still investigating a number of offshore transactions of the former Air Malta purchasing clerk: a complex investigation which, once concluded, could possibly join a lot of dots, as a result placing more grey areas under the spotlight.

Readers may remember the dealings of the Fortina Hotel owners with the Lands Authority as a result of which public land made available to the Fortina developers in the past for tourism purposes is currently being redeveloped partly as offices and apartments. It is not so far clear as to who and how made it possible for subsidised public land to be available for speculation. A very grey area which the Lands Authority has a duty to be very transparent about.

In the grey shadows there are a number of interlocking commercial interests which I presume time and again appear on the computer screens of the Lands Authority internal auditor. Explanations have not been forthcoming yet.

When the Lands Authority was created, rising from the ashes of the former Lands Department, it was depicted as the long-awaited solution to the opaque internal secretive dealings involving land in public ownership. The Lands Authority would no longer have a king. Now it ought to be part of the republic! Its annual reports emphasise that it has a corporate philosophy grounded in the values of fairness, accountability and transparency. Really? The (former) internal auditor is definitely not convinced about that!

published on The Malta Independent on Sunday: 4 July 2021

Meta l-istat jinkoraġixxi l-evażjoni tat-taxxa

F’indirizz li għamlet nhar it-Tnejn liċ-Chicago Council on Global Affairs, Janet Yellen, Segretarju għat-Teżor tal-Istati Uniti, ippreżentat l-argument favur taxxa minima applikabbli għall-korporazzjonijiet multinazzjonali fuq livell globali, irrispettivament minn fejn huma bbażati.  Proposta ta’ din ix-xorta, kif rappurtat min-New York Times, ikollha s-saħħa li żżomm lil dawn il-kumpaniji milli jċaqilqu l-profitti tagħħom minn post għall-ieħor biex jevadu l-ħlas tat-taxxi dovuti minnhom.

Meta jitnaqqsu it-taxxi biex tinġbed l-industrija u n-negozju, emfasizzat  Ms Yellen, hemm is-sogru li mmissu l-qiegħ: fejn ser tieqaf? Ma nistgħux nibqgħu sejrin hekk. Il-kompetittività mhiex biss kif kumpanija tmur fil-konfront ta’ kumpaniji oħra.  Hi ukoll il-mod li bih nassiguraw  li l-gvernijiet ikollhom sistemi ta’ ġbir ta’ taxxa li jkunu stabbli b’mod li jistgħu jiġbru biżżejjed fondi x’jinvestu f’servizzi publiċi u jkunu f’posizzjoni li jirreaġixxu fi żmien ta’ kriżi. Hu meħtieġ li ċ-ċittadini bejniethom jerfgħu b’mod ġust il-piż tal-finanzjament tal-gvern.”

Din il-materja hi diġa fuq l-agenda tal-Unjoni Ewropeja. Hi opposta b’qawwa minn Malta, il-Lussimburgu, l-Irlanda u pajjiżi oħrajn.  L-argument dwar l-armonizzazzjoni tat-tassazzjoni hu parti integrali mill-ġlieda kontra l-evażjoni tat-taxxa u l-ħasil tal-flus.

Hu ta’ sfortuna li Malta (u pajjiżi oħrajn) repetutament abbużat mis-sovranità tagħha fuq materji ta’ taxxa. Huwa riżultat ta’ dan l-abbuż repetut li l-proposta dwar l-armonizzazzjoni tat-taxxa qabdet l-art b’mod li issa hi appoġġata ukoll mill-Istati Uniti tal-Amerka.  Malta rmiet il-vantaġġ kompetittiv tagħha billi abbużat minnu repetutament. Il-ħsara lir-reputazzjoni tal-pajjiż hi għaldaqstant awto-gol mill-kbar.

Malta ma tistax tkun kredibbli fil-ġlieda kontra l-evażjoni tat-taxxa u l-ħasil tal-flus jekk ser tibqa’ tiffaċilita l-evażjoni tat-taxxa fuq skala internazzjonali.  Xi snin ilu il-Grupp tal-Ħodor fil-Parlament Ewropew kien ippubblika studju intitolat Toxic Tax deals: when BASF’s tax structure is more about style than substance. Dan ir-rapport kien svela kif tul is -snin, il-kumpanija Ġermaniża ġgant tal-kimika BASF kien irnexxielha tevita u tiffranka l-ħlas ta’ biljun euro f’taxxi fuq 4 snin billi użat lill-Malta għal dan l-iskop. Dan sar billi kumpanija sussidjarja ġiet reġistrata f’Malta u t-taxxi dovuti, għax l-azzjonisti mhux residenti f’Malta, ħadu lura 6 euros minn kull 7 li kellhom iħallsu f’taxxa!

Il-każ tal-Korporazzjoni Amerikana Apple fl-Irlanda, kif nafu, wassal għall-evażjoni ta’ 13-il biljun euro f’taxxi. L-iskandlu Luxleaks fil-Lussimburgu ukoll wera kif dan il-pajjiż żgħir fost il-fundaturi tal-Unjoni Ewropeja ukoll kien qed jinkoraġixxi l-evażjoni tat-taxxa.

Dawn huma ftit mill-eżempji. Bla dubju hemm bosta oħra li s’issa huma moħbija mill-iskrutinju pubbliku. Bħala riżultat ta’ dan kollu madwarna għaddejja evażjoni ta’ biljuni ta’ euro ta’ taxxi, kontinwament. Malta, l-Irlanda, il-Lussimburgu u xi pajjiżi oħra jiġbru parti żgħira mit-taxxi dovuti bħala ħlas talli jippermettu din l-evażjoni ta’ taxxa fuq skala pjuttost kbira.

F’Malta dan kollu kien possibli bħala riżultant tal-hekk imsejjaħ “kunsens nazzjonali” bejn il-PLPN dwar il-qasam finanzjarju. “Kunsens” li ilu fis-seħħ numru ta’ snin. Il-ħsara lir-reputazzjoni ta’ Malta li seħħet u għad qed isseħħ bħala riżultat ta’ dan kollu, għaldaqstant, ma jġorriex il-Partit Laburista waħdu. Il-Partit Nazzjonalista ukoll għandu resposabbiltà xi jġorr. Għalhekk fuq dawn il-materji in-Nazzjonalisti u l-Labour dejjem iħokku dahar xulxin.  

Sfortunatament l-evażjoni tat-taxxa u l-ħasil tal-flus huma ħafna drabi konnessi. Bosta drabi fejn issib waħda issib l-oħra ukoll.

It-triq il-quddiem m’għandiex ikollha impatt fuq is-sovranità fil-qasam tat-tassazzjoni kif determinat mit-trattati Ewropej permezz tal-ħtieġa tal-unanimità f’materji konnessi mat-taxxa. Imma hemm bżonn urġenti li l-qasam tal-politika fiskali ukoll jinbena fuq prinċipji etiċi b’saħħithom. U mhux dan biss. Għandu jkun assigurat darba għal dejjem li Malta ma tibqax tiddependi minn dħul ġej mill-evażjoni tat-taxxa.

Għax id-dipendenza tal-ekonomija Maltija fuq l-evażjoni tat-taxxa (u l-bejgħ tal-passaporti) hi ta’ inkwiet kbir għall-pajjiż. L-industrija tal-evażjoni tat-taxxa hi sors ta’ dħul kif ukoll ta’ impiegi li it-tnejn li huma inevitabilment jintilfu fi żmien qasir. Wasal iż-żmien li nippjanaw għal futur nadif, futur li mhux iktar dipendenti fuq l-evażjoni tat-taxxa.

Ippubblikat fuq Illum: il-Ħadd 11 t’April 2021

When the state encourages tax evasion

In a speech delivered on Monday to the Chicago Council on Global Affairs, Janet Yellen, US Treasury Secretary, made the case for a global minimum tax applicable to multinational corporations irrespective of where they locate their headquarters. Such a proposal, reported the New York Times, would prevent companies from shifting profits to evade taxes.

Lowering tax rates to attract business, emphasised Ms Yellen, is a race to the bottom which has to be addressed. Competitiveness is not just how companies fare against other companies. It is also about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crisis, and that all citizens fairly share the burden of financing government.

This issue is already on the agenda of the EU facing fierce opposition from Malta, Luxembourg, Ireland as well as others. The issue of tax harmonisation is an integral part of the fight against tax evasion and money laundering.

It is unfortunate that Malta (and others) have been repeatedly abusing its tax sovereignty. It is as a result of such repeated abuse that the proposal for tax harmonisation is gaining ground such that it now has the support of the United States of America too. As a result of greed Malta has squandered a competitive advantage by abusing it repeatedly and continuously. The resulting reputational damage is hence an own goal.

Malta (and the other countries) cannot be credible in the declared fight against tax evasion and money laundering if it keeps facilitating tax avoidance on an international scale. Some years back the Green Group in the European Parliament had published a study entitled Toxic Tax deals: when BASF’s tax structure is more about style than substance. This report reveals that over the years, the German chemical giant BASF used Malta to avoid the payment of one billion euros in taxes. This was done using the “legal” possibility to have tax refunds of up to six sevenths of the tax due in such cases where shareholders are not resident in the Maltese islands. Tax avoidance is tax evasion sanctioned by the state.

The Apple Corporation case in Ireland as a result of which another €13 billion in taxes were avoided is another example of tax evasion sanctioned by the state of Ireland. Luxleaks had also revealed countless of other examples as a result of which Luxembourg too embarked on state encouraged tax-evasion.

These are just some examples of many: the proverbial tip of the iceberg. There are undoubtedly countless of others, currently below the radar of public scrutiny, as a result of which the payment of billions of euros in taxes are being continuously avoided. Malta, Ireland, Luxembourg and other countries receive a small part of the actual tax due as a result of facilitating this state encouraged tax evasion.

Locally this scam is the result of the PNPL “national consensus” on financial institutions and fiscal policy in force for a number of years in Malta. The responsibility for the resulting reputational damage is thus not one to be shouldered by the Labour Party on its own, it has help from the PN which has continuously buttressed this abusive behaviour.

Unfortunately, tax evasion and money-laundering are inseparable twins!

The way forward need not impact the tax sovereignty afforded by the EU treaties through the unanimity rule on taxation issues. However, it necessitates ensuring that policy on all fiscal issues is also founded on sound ethical principles.

In addition to ensuring that fiscal policy is not in any way unethical it is about time that Malta does not any more, in any way, depend on tax avoidance.

The dependence of Malta’s economy on tax avoidance (and the sale of citizenship) is very worrying. The tax avoidance industry is a source of both revenue to the state and employment opportunities, both of which will be lost in the not-so-distant future. It is about time that we start planning for a cleaner future, a future that is, which is not dependent on the tax avoidance industry!

Published in the Malta Independent on Sunday : 11 April 2021

Sandro, Herman w it-taħwid dwar l-industrija tal-kostruzzjoni

Bħalissa għaddejjin bosta kummenti online dwar l-industrija tal-kostruzzjoni u dan fid-dawl tal-abbozz ta’ liġi dwar l-awtorità li ser tirregola l-industrija tal-bini presentment quddiem il-Parlament.

Huwa tajjeb li nkun ċar dwar dak li qed nitkellmu. Is-suġġett hawn mhux l-iżvilupp, il-politika dwar l-użu tal-art inkella l-impatti ambjentali fihom infushom. Is-suġġett hu l-industrija tal-bini. L-industrija tal-bini mhux l-iżviluppaturi. Anzi l-iżviluppaturi huma l-klijenti tal-industrija tal-bini!

Li l-industrija tal-bini tkun regolata aħjar huwa mhux biss meħtieġ imma essenzjali. Madwar sentejn ilu kont tkellimt dwar dan hekk kif kienet ippubblikata l-White Paper dwar is-suġġett.

Ma hemmx bżonn li l-MDA, l-Assoċjazzjoni tal-Iżviluppaturi, tkun fuq il-Bord ta’ din l-awtorità minkejja l-isforz imqanżah ta’ Herman Schiavone, istigat bla dubju mill-iġbid tal-ispag ta’ Sandro. Hi l-industrija tal-kostruzzjoni li teħtieġ li tipparteċipa fil-proċess u mhux il-lobby tal-iżviluppaturi. L-industrija tal-kostruzzjoni u l-lobby tal-iżviluppaturi anke jekk huma relatati mhumiex l-istess ħaġa: huma differenti u jeħtieġu li jkunu regolati b’metodi addattati għall-qasam tagħhom.

Nifhem li l-iżviluppaturi, bħall-periti u ħafna setturi oħra jeħtieġu industrija tal-kostruzzjoni organizzata, attentat u fuq kollox imħarrġa. Din l-awtorità bla dubju tista’ tkun il-mutur dwar dan kollu. Jeħtieġ ukoll li tkun trasparenti u ma tantx jidher li ser tkun mill-abbozz li ġie ippreżentat s’issa.

Jeħtieġ ukoll li titħalla taħdem. L-intervent ta’ Sandro biex idaħħal imnieħru mhux ta’ ġid, għax hemm mhux postu.

Edward Scicluna: bla boċċi

Ix-xhieda ta’ Edward Scicluna f’nofs il-ġimgħa fl-inkjesta dwar l-assassinazzjoni ta’  Daphne Caruana Galizia hi offensiva u triegħex. Mix-xhieda tiegħu stess Scicluna joħroġ bħala Ministru tal-Finanzi  bla sinsla, dgħajjef u beżżiegħ: inkapaċi li jkun deċiżiv fil-konfront tal-abbuż. B’riżultat ta’ dan  spiċċa jiċċertifika lilu nnifsu bħala  li mhux kapaċi jerfa’ fuq spallejh r-responsabbiltajiet ta’ Ministru.

F’dan kollu mexa fuq il-passi tal-kollega tiegħu il-Ministru tal-Affarijiet Barranin Evarist Bartolo. Fl-istess inkjesta, Bartolo, xehed ix-xahar l-ieħor meta qal li kien jippreferi strateġija ta’ sopravivenza: li jsalva l-ħajja politika tiegħu biex ikun possibli li jkompli l-ġlieda politika “fil-futur”. Dan qalu meta kien rinfaċċat bin-nuqqas ta’ azzjoni konkreta min-naħa tal-Gvern (li minnu hu kien u għadu jifforma parti) fil-konfront tal-involviment tal-eks-Ministru Konrad Mizzi u l-eks-Chief of Staff tal-Prim Ministru Joseph Musca,t Keith Schembri, fl-iskandlu magħruf bħala Panama Papers.

Il-kaz ta’ Edward Scicluna mhux  wieħed iżolat. Il-qarrejja jiftakru s-seduta ta’ smigħ ta’  Leo Brincat fl-2016 fil-Parlament Ewropew meta ġie mgħarbul mill-Kumitat tal-Budget in vista tan-nominazzjoni tiegħu biex ikun jifforma parti mill-Qorti Ewropea tal-Awdituri.  Meta, in vista tad-dikjarazzjonijiet tiegħu kien ippressat għal tweġiba mill-Membri tal-Parlament Ewropew dwar il-għala ma rreżenjax, Leo Brincat kien wieġeb li ma kellu l-ebda xewqa li jkun “eroj għal ġurnata biex imbagħad, wara jispiċċa f’baħħ politiku”.

Edward Scicluna quddiem l-inkjesta qal : “għalfejn għandi nirreżenja jien, meta hu ħaddieħor li għamel il-ħażin?” Żied jgħid li hu “daħal fil-politika biex jagħti servizz” u dan minkejja li kien komdu Brussel bħala Membru tal-Parlament Ewropew b’salarju ta’  €100,000.

Li jagħti l-pariri lil Joseph Muscat biex jiddistakka ruħu mill-impatti tal-iskandlu tal-Panama Papers mhux biżżejjed.  Edward Scicluna kien bla dubju jaf, anke kif jirriżulta mix-xhieda tiegħu, li dawk ta’ madwar Joseph Muscat kienu qed iduru mar-regoli biex jevitaw obbligi dwar trasparenza u kontabilità, u dan biex jilħqu l-għanijiet tagħhom.  Bħala Ministru tal-Finanzi Scicluna seta’, kieku ried, jaħsad ras dan l-abbuż mill-ewwel, bla ma jħallieħ jikber. Iżda minflok ipprefera jitfa’ ir-responsabbiltà fuq ħaddieħor: ipprova  jiddistakka ruħu biex jevita l-inkwiet u jibqa’ komdu.

Ir-responsabbiltajiet ta’ Edward Scicluna bħala Ministru tal-Finanzi imorru lil hinn milli jħejji l-budget bi stimi ta’ dħul u infieq. Għandu ukoll l-obbligu li jassigura li l-infieq tal-Gvern ikun wieħed trasparenti b’kontabilità sħiħa, u dan irrispettivament minn liema awtorità, Ministeru jew ċrieki madwar il-Prim Ministru jkunu fdati minn xi proġett speċifiku.

Il-Prim Ministru għandu l-obbligu li jmexxi bl-eżempju: għandu jassigura ruħu li kemm il-Kabinett tiegħu kif ukoll dawk kollha madwaru jimxu bi trasparenza u kontabiltà sħiħa. Jekk jonqos  milli jagħmel dan hu obbligu tal-membri kollha tal-Kabinett li jew jisfurzawh jaġixxi sewwa inkella li jirriżenjaw mill-Kabinett u jkomplu l-kritika tagħhom minn barra. Kull membru tal-Kabinett li jonqos li jaġixxi b’dan il-mod ikun kompliċi u responsabbli flimkien ma dawk li jkunu qed jabbużaw.

Dawk madwar il-Prim Ministru m’għandhomx jitħallew imexxu b’mod li jevitaw li jagħtu kont ta’ għemilhom u b’hekk iġibu fix-xejn il-ħidma tal-Parlament li kontinwament isus fuq it-trasparenza u l-kontabilità bla eċċezzjoni.

Hu irresponsabbli li Edward Scicluna issa jipprova jiddistakka ruħu pubblikament minn Joseph Muscat u dawk ta’ madwaru. Issa li Muscat m’għadux Prim Ministru hu faċli li jagħmel dan! Messu kellu l-boċċi li jaġixxi immedjatament li nduna x’kien għaddej.

Ippubblikat fuq Illum : Il-Ħadd 16 t’Awwissu 2020