Tourism: from Covid to Climate Change

The tourism lobby, through the MHRA (Malta Hotels and Restaurants Association), is once more breathing down the authorities’ neck. Some of their former employees have not returned, after the pandemic.  They are obviously referring to those employees of theirs who were shed off their payroll, as soon as the pandemic impacts started being felt.

After treating some of their employees like shit they are now asking for tax exemptions as a carrot to attract them back to fill the void created. Tax exemptions?  Difficult to qualify if you are employed on a zero-hour contract, hardly paying any tax at all!

The fact that an increasing number of employees are migrating from the tourism industry, is indicative that the employment conditions and the remuneration paid by the industry, at least, to some of its employees, is not worth it. If it were, former employees would come back on their own without the need to be enticed with tax exemptions.

Specifically, sections of the tourism industry are based on cheap labour: paying miserly hourly rates on zero-hour contracts. In addition to having reasonable rates of pay, it is imperative that zero-hour contracts are scrapped. That is to say a contract of employment must be for an agreed number of hours per week and not left at the absolute discretion of the employer. Greens in Malta have repeatedly advocated this step. A Labour government is apparently not interested.

Isn’t it about time that the tourism industry gets its act together? Government has over the years dedicated many resources to help the industry get on its feet. Various subsidies and favourable administrative decisions including planning policies designed to ride roughshod over the residential community are in place. Yet they want more.

At almost 3 million tourists in 2019, Malta is definitely close to a saturation point in the uptake of tourists it can handle. This has placed too large a strain on the country’s infrastructure.

Covid has clearly identified an Achilles heel. We need to learn a number of lessons. Foremost to reduce our dependence on tourism in order to ensure that the next time movement between countries is an issue, impacts on all are cushioned considerably. The next issue is round the corner. It is climate change.

Last week various initiatives were announced by the EU Commission in order that the target of carbon neutrality by 2050 is achieved. The Commission has identified a number of measures which could facilitate the achievement of an intermediate target of 55 per cent greenhouse gas emissions reduction by 2030 and beyond.

One such initiative is the environmental taxing of aviation fuel. Such an initiative is intended to internalise the environmental costs of such flights. This could result in either of two options: the payment of a carbon tax by those who use such flights or the use of alternative modes of transport thus avoiding altogether the payment of the tax.

On mainland Europe, use of trains is in many cases a suitable alternative which has considerably reduced environmental impacts. However, in our case we do not have practical alternatives to aviation. This will inevitably increase the costs of flights and consequently bring about a reduction in the number of tourists opting to visit Malta. Most of our competitors will be similarly impacted, but that is no consolation for the industry! Cheap plane fares could soon be history.

As announced by Minister Miriam Dalli, Malta expects that it is a “special case”. Most probably it will be successful in negotiating a reasonable transition, and/or some exceptions. In the long run, however, opposing outright such a measure goes against Malta’s long-term interests. Malta, like all island states, together with coastal settlements and communities, will have to face some of the worst impacts of climate change, that is sea-level rise. The climate, would not care less about our special case, or our economy. It will impact us just as forcefully. The climate is merciless.

It would be pertinent to remember that most of our tourism infrastructure lies along or within reach of the coast. This signifies that a sea-level rise could easily play havoc with such infrastructure. If substantial, a sea-level rise will also seriously impact our coastal communities, which are spread over quite a large area along the coast.

It is about time that we stop and think carefully. Tourism is at the crossroads. It needs to be subject to an overhaul: taking into consideration the covid lessons, and applying them to the climate change scenario which sooner or later we will have to face. This is the future of tourism, not tax exemptions.

published in The Malta Independent on Sunday : 25 July 2021

Another fake consultation

Reading through the Green Paper entitled “Towards Cleaner Vehicles on Our Roads” it is evident that this consultation process is flawed. After being 4 years in the making, instead of proposing solutions it just asks questions which should have been answered by the Green Paper itself as part of the consultation process.

This is symptomatic of a government which has been continuously emitting conflicting signals on transport issues. The Green Paper recognises the obvious when it states that transport combustion emissions increased by 86 per cent over the period 1990-2018. The massive investment in unnecessary road infrastructure has been a major contributor in this respect, a point which is conveniently ignored by the Green Paper.

The proposed shift to cleaner vehicles on our roads is welcome, but on its own it is not sufficient. This measure will definitely reduce combustion emissions. It will however also shift the said emissions from our roads to the sources of the electrical energy used to electrify our roads. Knowing that government is planning to install a second interconnector to the Sicilian mainland for the supply of electricity it is clear that part of the emissions will be shifted 80 kilometres to the north, the rest to Delimara. It is still unclear how this will be reflected in the price we pay for electricity, as information on the matter is conveniently absent from the Green Paper.

The Green Paper rightly discusses the need to upgrade the skills of the technical personnel required in servicing and maintaining electric and hybrid vehicles. It also points towards the need for substantial investments in the infrastructure required particularly for charging points. However, it fails to address a number of points of controversy which require urgent resolution and should have been addressed through this consultation process.

The consumption of petrol and diesel is bound to decrease as a result of the drive towards the electrification of our roads. The rate of decrease of fuel consumption will depend on the manner in which the electrification exercise will proceed throughout the transition period. Why then has no moratorium been announced on the development and construction of new fuel stations? A number of controversial applications for fuel stations are still burdening the land use planning process when it should be crystal clear to all that in view of the electrification process, they will no longer be required. The consultation process is conveniently silent on the matter thereby encouraging unnecessary pressures on the planning process.

Simultaneously it is pertinent to point out that the sale of fuel contributes a substantial income to the exchequer which income will now slowly taper to near zero through the transition period. The Green Paper fails to volunteer information in this respect. How will this substantial income be substituted? Will the electrification process itself provide the substitute financial resources or will other areas of activity be tapped to make good? The amounts involved are substantial. In fact, the budgetary estimates for 2021 indicate a projected income of €154 million from excise duties on petroleum products. What are government plans for the substitution of this income? The Green Paper is once more completely silent on the matter.

The Green Paper refers to Low Emission Zones but it does not have the courage to make specific proposals. It is imperative that the transition period from now until the full electrification of our roads gradually adopts the identification of Low Emission Zones within which internal combustion engine vehicles will have a prohibited access. The Green Paper fails in this respect too.

The Green Paper refers to two studies which have been commissioned by the Cleaner Vehicles Commission on the electrification of our roads. These studies are not however available to inform this public consultation.

Notwithstanding having been announced four years ago, with ample time for preparation, this consultation process is deficient. It fails to address the basics: it fails to inform. It is a fake consultation.

published on The Malta Independent on Sunday : 20 June 2021

Nitgħallmu min-natura

Aħna familjari ma kif taħdem l-ekonomija linejari. Nagħmlu użu mir-riżorsi li nsibu madwarna u wara li ma jkollniex iktar bżonnhom narmuhom.  

In-natura taħdem ferm differenti minn hekk u minn għandha nistgħu nitgħallmu ħafna. Fil-fatt jekk nippruvaw nimxu fuq il-passi tan-natura nistgħu nsolvu bosta mill-problemi li nħabbtu wiċċna magħhom.  

Teżisti linja ta’ studju speċjali imsejħa biomimicry (imitazzjoni tan-natura) li tfittex kif nistgħu nifhmu iktar lin-natura u nitgħallmu minn għandha. Li nibdlu l-mentalità tagħna li narmu kollox hi waħda mit-tagħlimiet bażiċi li għandna bżonn.

Ħarsu lejn siġra. Meta jasal il-waqt addattat għaliha twaqqa’ l-weraq li jitmermru fil-ħamrija madwar is-siġra.  Dawn, imbagħad isiru ħaġa waħda mal-ħamrija u jservu biex is-siġra terġa tassorbi n-nutrijenti akkumulati.

Hekk taħdem l-ekonomija naturali. In-natura ma timxix bħalna, ma tarmi xejn. Issib użu għal kollox. Għalhekk ngħidu li l-ekonomija tan-natura hi waħda ċirkulari għax ma tarmi xejn, u tirriċikla kollox.  Kull prodott naturali li jispiċċa ma jintremiex iżda jitmermer u jerġa’ jitwieled mill-ġdid f’xi forma jew oħra. Jidħol f’ċiklu naturali ġdid.

Fil-ktieb tagħhom Cradle to Cradle: Remaking the way we make things William McDonough and Michael Braungart jiffukaw fuq dan kollu. Jidentifikaw inizjattivi speċifiċi  industrijali u kummerċjali li bihom inaqqsu l-użu ta’ materjali fl-ekonomija, dik li nsejħula dematerialisation. Bħala riżultat ta’ dan jista’ jitwettaq ħafna iktar bl-użu ta’ inqas riżorsi.  Ikollna l-istess kwalità ta’ servizz (jew aħjar) b’inqas użu ta’materjal: effiċjenza prattika fl-użu tar-riżorsi.

Dan iwassal mhux biss biex jonqsu l-ispejjes tal-użu tal-materjal imma ukoll jitnaqqsu l-ispejjes konnessi mal-enerġija użata: dawn huma uħud mill-benefiċċji li ġġib bidla minn ekonomija linejari għal waħda cirkulari.  Twassal ukoll għal żieda fl-investiment kif ukoll għal żieda fl-impiegi li jistgħu jinħolqu. Il-kontribut finali jkun li ntejbu l-kwalità tal-ħajja ta’ kulħadd.

Din il-ġimgħa l-Ministru tal-Ambjent aġġornana dwar il-pjan nazzjonali ta’ azzjoni biex ikunu applikati f’pajjiżna l-prinċipji tal-ekonomija ċirkulari.  Dan hu tajjeb, avolja dan hu paroli li ilna ħafna nisimgħu dwaru tul is-snin: mingħajr ma jsir xejn.

Il-Ministru fisser il-pjani tal-Gvern fuq il-magni li ser ikunu stallati madwar Malta biex permezz tagħhom ikun iffaċilitat ir-riċiklaġġ tal-fliexken tal-plastik u skart ieħor konness mal-ippakkeġġjar. Riżultat ta’ din l-inizjattiva fliexken tal-plastik u kontenituri oħra (tal-birra u tal-inbid, per eżempju) jinġabru f’magni mxerrdin mal-pajjiż u minnhom tieħu lura d-depożitu li tkun ħallast meta tkun xtrajt l-ilma, birra, inbid jew inkella luminata.

Però jkun utili li niftakru li fl-2004, kien hemm proposta kważi simili li kienet ġiet ippreżentata lill-Gvern immexxi mill-Partit Nazzjonalista. Din il-proposta kienet bħala alternattiva għall-eko-kontribuzzjoni li kienet qed tkun introdotta dakinnhar.   Kienu Farsons li fl-2004 ipproponew skema ta’ depożitu fuq il-kontenituri, liema depożitu kien ikun jista’ jittieħed lura kif kien qed iseħħ fid-Danimarka. Sfortunatament kien hemm oġġezzjonijiet kbar għall-dik il-proposta u din għaldaqstant flok ma kienet diskussa u mtejba ġiet imwarrba u injorata. Il-Gvern dakinnhar qagħad fuq dak li qalu industrijalisti oħra tal-luminati li kellhom aċċess ikbar għall-widna tal-Prim Ministru Gonzi. Dan hu kollu dokumentat.

Wara sbatax-il sena, mela, erġajna wasalna fil-punt tat-tluq oriġinali. Imma sadanittant inħlew sbatax-il sena.  

Hu fl-interess ta’ kulħadd li din l-iskema titħaddem sewwa u li tirnexxi. L-iskop hu li jkun irkuprat 85 fil-mija tal-iskart tal-ippakkeġġjar li hu ġġenerat fil-gżejjer Maltin. Nemmen li hu possibli li din il-mira tintlaħaq, kif kien anke possibli li tintlaħaq sbatax-il sena ilu. Din l-iskema ddaħħal ftit sens fil-politika tal-immaniġjar tal-iskart f’Malta. Nittama li ma tkunx ostakolata bħal ta’ qabilha.

Nistennew li jasal il-jum li tkun implimentata.

Ippubblikat fuq Illum : il-Ħadd 23 ta’ Mejju 2021

Lessons from nature

We are accustomed to the functioning of the linear economy. We extract the resources from the earth, we make use of them and subsequently when they are beyond their useful life, we throw them away.

Nature works quite differently. We can learn a lot from nature. As a matter of fact, if we try to imitate nature, we can solve many of the problems which we face.

Biomimicry is a relatively new branch of study which seeks ways in which we can learn from nature. Discarding our throwaway attitudes is one such basic lesson.

Take a look at any tree. At the appropriate time, it sheds its leaves, which disintegrate in the soil below. Nature does not waste the leaves shed by the tree, as they are reused and reabsorbed through the roots of the same tree as nutrients.

This is how nature’s economy works. Mother nature functions on the basis of a cradle-to-cradle philosophy in contrast to our cradle-to-grave attitude. The natural economy is a circular one which does not throw anything away: it recycles everything. At the end of the useful life of any natural product this does not end in a landfill but it gives birth to another product, a new fruit. It is reintroduced into the natural cycle.

In their book Cradle to Cradle: Remaking the way we make things William McDonough and Michael Braungart focus specifically on this matter. They identify specific industrial and commercial initiatives which seek to dematerialise the economy as a result of which we can end up doing much more with less use of resources. The same or better level of service is achieved but, in the process, there are substantially fewer material inputs: practical resource efficiency.

In addition to saving on material costs as well as energy used, the transition from a linear to a circular economy presents numerous potential benefits. In particular, it attracts additional investment and can create thousands of jobs that practically and realistically contribute to making the world a better place to live in.

This week the Minister for the Environment gave an update on a national action plan to intensify efforts to align Malta to circular economy principles. This is positive even though we have heard this a multitude of times over the years.

The Honourable Minister outlined government’s plans on plastic bottle return machines which will be available all over the islands to facilitate their recycling. As a result of this initiative plastic bottles will be returned at which point a deposit paid on their purchase will be refunded.

It would be pertinent to point out that way back in 2004, or thereabouts, a proposal essentially very similar to this had been submitted to the then PN led government as an alternative to the eco-contribution scheme.  In fact, Farsons had then proposed the setting up of a deposit refund scheme for packaging waste on the basis of the Danish model. It was however unfortunately shot down instead of being developed and adapted to the local circumstances. Government instead opted for an eco-tax as emphasised by another powerful lobby which had a much easier access to Prime Minister Gonzi and his entourage. This is all documented.

Seventeen years down the line we are back at the original point of departure. Seventeen years have in the meantime been wasted. It is in everybody’s interest that the proposed scheme functions successfully. The objective is to achieve an 85 per cent recycling of the packaging waste generated on these islands. I believe that it is achievable now just as it was seventeen years ago. It puts back some sense in Malta’s waste management policy! Hopefully it will not be sabotaged once more.

I look forward to the implementation date.

published in The Malta Independent on Sunday : 23 May 2021

Ma’ Reno Bugeja: lil hinn mill-bebbux

Reno ġurnalista b’esperjenza li għandi kull rispett lejh. Ikun ippreparat sewwa biex ikun jista’ jindirizza l-argument quddiemu.

L-intervista kienet iffukata fuq l-ADPD u l-futur tiegħu. X’inhi r-raġuni għall-fatt li minkejja dawn is-snin kollha għadna partit żgħir?

Tul l-intervista Reno, b’sengħa, kontinwament ipprovokani biex joħroġ l-argumenti u l-ispjegazzjonijiet tiegħi.

Il-ħin ma taraħx għaddej għax l-argumenti jintiżġu flimkien b’ħeffa kbira b’mod li sat-tmiem jidher quddiemek mużajk ta’ argumenti li jagħti stampa ċara.

Id-diffikultajiet li niffaċċjaw huma essenzjalment tnejn.

L-ewwel hemm sistema elettorali li tul is-snin fittxet dejjem li tikkonsolida l-ħakma ta’ żewġ partiti fuq il-pajjiż u l-istituzzjonijiet tiegħu.

It-tieni hemm il-frammentazzjoni. Dawk li jaħsbuha bħalna huma mifruxa. Tul is-snin dejjem kien hemm diffikulta biex ninġabru flimkien. L-għaqda bejn l-Alternattiva Demokratika u l-Partit Demokratiku f’dan is-sens kien pass kbir il-quddiem. Ovvjament hemm ħafna iktar xi jsir biex l-ilħna progressivi jinġabru flimkien.

L-intervista serviet biex nispjega ukoll il-kuntrast politiku tagħna ma dak tal-partiti l-oħra.

Tkellimt ftit dwar l-ambjent. Emfasizzajt li l-ambjent għalina jmur lil hinn mill-apprezzament tal-bebbux, id-dud u l-fjuri. L-apprezzament u l-ħarsien tal-ekoloġija huwa importanti ħafna f’ħidmietna. Imma l-ħarsien tal-ambjent ifisser ukoll il-ħarsien u t-titjib fil-kwalità tal-ħajja, tagħna u tal-ġenerazzjonijiet ta’ warajna.

Tkellimna fit-tul, madwar 40 minuta.

Issibu l-ħsibijiet dwar kif il-pajjiż qed isir dipendenti fuq l-evażjoni tat-taxxa. Nafferma għal darba oħra li l-iskema tal-bejgħ taċ-ċittadinanza mhiex aċċettabbli għalina. Hi prostituzzjoni tal-pajjiż.

Hemm ukoll kummenti dwar l-abort u kif dan fil-prattika diġa qed isir fl-isptar Mater Dei.

Il-ħidma politika tagħna tkompli. Pass pass nimxu l-quddiem.

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

Anke Bendu bil-problemi ma’ tat-taxxa

Il-gazzetti tal-lum qalulna li wara kollox, dwar it-taxxi anke Bendu, jiġifieri Bernard Grech, għandu storja ta’ taxxi b’lura.

Il-Malta Today qaltilna: PN leadership candidate has a history of unpaid taxes. Is-Sunday Times qaltilna: Bernard Grech sorts out his tax dues. L-Illum, min-naħa l-oħra tgħidilna li: Grech ma jgħidx kif ħallas €62,000 f’taxxa u VAT li kellu pendenti fuq medda ta’ snin.

Hemm ħafna x’jiġi spjegat minn Bendu Grech. Fi ftit kliem kif jista’ jitwemmen meta jitkellem dwar il-ġustizzja soċjali meta kellu dawn il-problemi kollha mal-awtoritajiet tat-taxxa? Il-fatt li ftit ilu ftiehm ma jistax inessi li sa dakinhar kien jaħsibha mod ieħor.

It-taxxa hi strument ta’ ġustizzja redistributtiva u min jevadi jew jipprova jevadi t-taxxa jkun qed jaħrab mir-responsabbiltajiet tiegħu. Fuq dan m’hemmx x’tagħżel bejn Bendu u Drinu : it-tnejn pezza waħda.

It-turiżmu wara l-pandemija

It-turiżmu kien wieħed mis-setturi li l-iktar intlaqat bħala riżultat tal-pandemija Covid-19. Tul is-snin in-numri tat-turisti li ġew iżuruna żdied kull meta tjiebet il-konnettività: min-naħa l-oħra hekk kif il-konnettività naqset u eventwalment waqfet kompletament, ġara bil-maqlub.

Iktar kmieni din il-ġimgħa bdew jaslu l-ewwel turisti fil-port u l-ajruport tagħna. Bil-mod qed terġa’ tiġi stabilita l-konnettività li twassal biex it-turiżmu jibda jirpilja bil-mod. Il-Ministru tat-Turiżmu Julia Farrugia-Portelli f’dawn il-ġranet ħabbret il-mira tal-Gvern: 700,000 turist sal-aħħar tas-sena. Iktar kmieni t-tmexxija tal-Ajruport Internazzjonali ta’ Malta kienet emfasizzat li jeħtieġ madwar sentejn biex il-wasla tal-passiġġiera tirkupra u naslu fejn konna qabel ma faqqgħet il-pandemija.

Jista’ t-turiżmu qatt jilħaq il-livelli ta’ qabel il-pandemija?

Jeżistu stimi diversi dwar il-kontribut tat-turiżmu lejn l-ekonomija. Stima minnhom tipponta lejn kontribut dirett ta’ 5 fil-mija tal-ekonomija. Imma, bħala riżultat tal-impatt fuq setturi oħra dan is-sehem jitla għal madwar 12 fil-mija. Barijiet, restoranti, ħwienet li jbiegħu bl-imnut, attivitajiet pubbliċi, l-industrija tad-divertiment u t-trasport (in partikolari l-kiri tal-karozzi) huma dipendenti fuq it-turiżmu. Setturi partikolari bħat-tagħlim tal-Ingliż u ċ-ċentri tal-għaddasa huma meqjusa bħala parti integrali mill-ekonomija turistika.

Intqal ħafna dwar l-impatt tal-pandemija fuq il-lukandi. Imma anke dawk li jipprovdu sodod turistiċi barra mil-lukandi ġarrew fuq spallejhom impatt sostanzjali avolja ftit li xejn issemmew fid-dibattitu konness mal-impatti tal-pandemija. Dan huwa settur li jinvolvi negozjanti żgħar u dawk li nirreferu għalihom bħala micro-businesses li kull wieħed minnhom jimpjega inqas minn għaxar persuni.

UNCTAD, l-Aġenzija tal-Ġnus Magħquda dwar il-Kummerċ u l-Iżvilupp, iktar kmieni din il-ġimgħa ħabbret li l-iġġammjar tat-turiżmu minħabba l-pandemija ser jiswa’ lill-industrija globali tat-turiżmu madwar $1.2 triljun . Din l-istima tista’ tirdoppja skond kif tiżviluppa t-tieni mewġa tal-pandemija.

Il-Ġamajka tista’ titlef madwar 11 fil-mija tal-Prodott Gross Domestiku, t-Tajlandja 9 fil-mija, l-Italja 5 fil-mija. Fl-Unjoni Ewropeja l-agħar impatti huma mal-kosta Mediterranja fejn l-ekonomija hi dipendenti ħafna fuq it-turiżmu. Minbarra Malta hemm l-Italja, l-Kroazja, is-Slovenja, Cipru u l-Greċja li kollha ntlaqtu sew. It-Turkija u t-Tunesija, parteċipanti Mediterranji fl-industrija turistika ukoll iġġammjaw, wara li gawdew minn żidiet sostanzjali fin-numri ta’ turisti tul is-snin.

Jagħmel sens li l-Gvern, f’dan il-waqt, permezz tal-Awtorità Maltija tat-Turiżmu, qiegħed jiffoka fuq li jġib lill-industrija tat-turiżmu lura fuq saqajha. Dan imma, mhux biżżejjed. Jeħtieġ li nibdew naħsbu dwar il-futur tal-industrija u dan billi neżaminaw fid-dettall dak li l-industrja teħtieġ li tiffaċċja fit-tul.

Fi tmiem is-sena li għaddiet, l-2019, ilħaqna in-numru ta’ 2.8 miljun turista iżuruna. Il-punt hu jekk dawn in-numri humiex sostenibbli. Dan hu argument ta’ dejjem li ilu għaddej sa minnmeta n-numri kienu ferm iżgħar. Id-dibattitu kien, u għandu jibqa’ jkun dwar jekk għandniex niffukaw iktar fuq il-kwalità milli fuq il-kwantità.

Il-miġja fostna tal-linji tal-ajru low-cost bħala parti essenzjali mill-politika tat-turiżmu illum tpoġġi emfasi ikbar fuq in-numri. Din hi għażla politika li saret u li teħtieġ li tkun eżaminata u analizzata fil-fond. L-impatti ekonomiċi għandhom jitqiesu fl-istess ħin mal-impatti ambjentali. Irridu niftakru kontinwament li t-turiżmu jiġġenera bosta impatti ambjentali.

Wasal iż-żmien li nirrealizzaw li d-dibattitu meħtieġ dwar il-futur tat-turiżmu jeħtieġ li jsir fl-isfond tal-Patt l-Aħdar: The Green Deal.

L-emissjonijiet tal-ajruplani ser ikollhom ikunu indirizzati fil-futur qarib. Hu inevitabbli li jiddaħħlu taxxi dwar dawn l-emissjonijiet (carbon taxes) fi żmien mhux il-bogħod. Jekk mhux ser jittieħdu passi immedjati dwar dawn l-emissjonijiet ser ikun ħafna iktar diffiċli, biex ma ngħidx impossibli, biex ikunu ndirizzati l-konklużjonijiet tas-Summit Klimatiku ta’ Pariġi tal-2015. Summit li Malta ħarġet tiftaħar li kienet wieħed mill-ewwel pajjiżi li rratifikatu. F’dak il-mument (jekk nibqgħu ma nieħdux passi) mhux biss it-turiżmu jaqla’ daqqa kbira oħra imma tkun il-kwalità tal-ħajja tagħna lkoll li tieħu daqqa l-isfel.

Il-gżejjer Maltin, bħall-parti l-kbira tal-gżejjer imxerrda mal-ibħra, ikunu minn tal-ewwel biex jaqilgħu ġo fihom l-impatti tat-tibdil fil-klima. Il-kosta tkun effettwat bl-għoli tal-livell tal-baħar. Tajjeb li niftakru li l-infrastruttura tat-turiżmu qegħda kważi kollha mal-kosta! Iktar ma ninjoraw dan il-fatt bażiku ikbar tkun id-daqqa li naqilgħu.

S’issa naħseb li kulħadd irrealizza kemm l-industrija tat-turiżmu hi waħda fraġli. Kull xokk li l-industrija issofri jista’ jwassal għal tnaqqis kbir fl-impiegi f’din l-industrija. It-turiżmu għadu staġjonali wisq u dan minnu innifsu jwassal għal kundizzjonijiet tax-xogħol ta’ natura prekarja.

Jeħtieġ li nippjanaw iżjed billi nħarsu il-bogħod u fuq medda twila ta’ żmien: naħsbu u nippjanaw sewwa dwar l-impatti soċjali, ambjentali u ekonomiċi ta’ kull deċiżjoni. Dan wara kollox hu l-proċess li jwassal għal żvilupp sostenibbli. Hu l-unika mod kif nistgħu nassiguraw li l-impatti negattivi tal-industrija tat-turiżmu nistgħu nindirizzawhom illum qabel għada.

Ippubblikat fuq Illum : il-Ħadd 5 ta’ Lulju 2020

Post-Covid Tourism

Tourism is understandably one of the hardest hit sectors as a result of the Covid-19 pandemic. Over the years, tourism numbers increased substantially as a result of an increased connectivity: the reverse happened the moment that connectivity was restricted or became practically inexistent.

Earlier this week saw the first arrivals at our air and seaports. Slowly, connectivity is being restored. It is expected that tourism will now start a slow recovery. Tourism Minister Julia Farrugia-Portelli is on record with a 700,000-tourist target for year end. Malta International Airport CEO had earlier opined that it will take at least two years to recover to pre-pandemic level airport movements.

Will tourism ever recover to the pre-pandemic levels?

There are various estimates of the contribution of tourism to the economy. One such estimate points at a direct contribution of around 5 percent of our economy. However, as a result of its impacts on other sectors the overall contribution rises to around 12 percent. Bars, restaurants, retail trade, events, entertainment and transport (in particular car hire), are heavily dependent on tourism. Specific sectors such as the English language school sector as well as diving are important sectors in the tourism economy.

Much has been stated on the impact of the pandemic on the hotel industry. The providers of non-hotel beds, however, have also been heavily impacted by the pandemic, but they have not featured much in the post-Covid-19 debate. This is a sector which involves a number of small-scale investors and micro-businesses each employing less than ten employees.

UNCTAD, the UN Trade and Development Agency, earlier this week stated that the four-month standstill of the tourism industry due to the pandemic Covid-19 could cost the industry around $1.2 trillion. This estimated cost could more than double, depending on the severity and spread of a second wave of the pandemic.

Jamaica could lose as much as 11 percent of its GDP, Thailand 9 percent, Italy 5 percent. In the EU, the worst impacts are along the Mediterranean coast where the economy is heavily dependent on tourism. In addition to Malta, Italy, Croatia, Slovenia, Cyprus and Greece are also heavily impacted. Turkey and Tunisia, Mediterranean players in the tourism industry have also been almost at a standstill, after experiencing a substantial expansion of their tourism industry throughout the years.

It is understandable that government through the Malta Tourism Authority is currently focused on getting tourism back on its feet. This is however not enough. We must start discussing a long-term view of the tourism industry.

At the end of 2019 the 2.8 million mark of tourists visiting the Maltese islands had been attained. The point at issue is whether this is sustainable in the long-term. This has been a perennial issue in tourism politics since the days when the numbers were much lower. The debate was and should be whether we should focus more on quality than on quantity.

The advent of low-cost carriers as an essential part of the tourism equation places more emphasis on numbers than on quality. It is a choice which may need to be analysed and revisited. Economic impacts have to be viewed concurrently with environmental impacts. We must remember that tourism has a considerable environmental impact. It is about time that the tourism debate is carried out within the parameters of the Green Deal.

Aeroplane emissions will at some point in time in the near future have to be addressed. Carbon taxes will sooner or later come into play. Unless they are addressed immediately it will be more difficult, if not practically impossible, to address the Paris Climate Change conclusions to which Malta has adhered. At that point it will not be just the tourism industry but our whole lifestyle which will be in for the chop.

The Maltese archipelago, like all islands, will bear the brunt of climate change impacts. The coastline will be severely hit by a sea level rise. It may be pertinent to remember that the coast houses practically all of the tourism infrastructure. The longer we ignore this basic fact, the more severe will the impacts be.

By now all of us are aware that Tourism is a very volatile industry: any shock will result in mass redundancies. Tourism is currently way too seasonal, and consequently it only serves to create precarious working conditions.

It is the time to plan ahead: thinking carefully of the social, environmental and economic impacts of all decisions. This is what sustainable development is, after all, about. It is the only way to ensure that the negative impacts of the tourism industry are addressed by us sooner rather than later.


published in The Malta Independent on Sunday : 5 July 2020