Greater EU tax harmonisation: PN “neither for nor against”

Despite widespread political consensus on this issue, the PN has – according to one of its European election candidates - reopened the discussion on its official position.

A candidate fielded by the Nationalist Party for the upcoming European elections has declared that the party in Opposition is currently re-evaluating its position on further tax harmonisation efforts within the European Union.

Replying to questions put forward by The Journal editor Sandro Mangion, who co-hosts a weekly European election debate called ‘L-Għażla għall-Ewropa’ on newsbook.com.mt, Lee Bugeja Bartolo said that the PN is still in the process of adopting a position in favour or against wider EU tax harmonisation.

Within the EU, there is an ongoing effort towards greater tax harmonisation among Member States. The Maltese government, and all six Maltese MEPs irrespective of their political affiliation, have consistently opposed any efforts towards full tax harmonisation within the EU. They have argued that the small island nation’s current tax regime, approved before joining the EU, is crucial for Malta’s economy, particularly to attract businesses.

Sandro Mangion: What is the PN’s position on this?

Lee Bugeja Bartolo: The PN is evaluating this proposal as we speak, but there are a number of economists who have objected to it and we need to continue listening to what they have to say on tax harmonisation. Of course, Malta has benefited – under Nationalist governments we attracted new sectors – thanks to tax incentives, that have been beneficial. Therefore, the extent of tax harmonisation within the EU requires careful consideration.

Sandro Mangion: But, in principle, is the PN against EU tax harmonisation?

Lee Bugeja Bartolo: We are discussing with economists.

Sandro Mangion: So it is not against

Lee Bugeja Bartolo: It (the PN) has taken no stance yet, for or against.

Aspiring PN MEP Lee Bugeja Bartolo.

One of the most vociferous Maltese MEPs on this issue in the European Parliament over the past years has been Alfred Sant (S&D), who has repeatedly pointed out that tax competition between EU countries can be advantageous for disadvantaged regions, such as islands and peripheral areas. Malta, for example, attracts multinational businesses by offering an 85% rebate on dividends paid to foreign shareholders.

“It is imperative to maintain differentiated tax systems in Europe especially when it comes to geographically remote areas. This will enable these territories to compete effectively within the Single European Market. By contrast, tax harmonisation would stimulate the flow of resources from peripheral regions to central areas within the Union, thereby undermining economic and social cohesion,” said the former Maltese prime minister, economist, and member of the European Parliament’s Committee on Economic and Monetary Affairs (ECON).

All the other Maltese MEPs have been singing from the same hymn sheet on this matter.

‘L-Għażla għall-Ewropa’, during which PN candidate Lee Bugeja Bartolo said that the PN is still to adopt a position in favour or against wider EU tax harmonisation. Segment starts at 58:10.

Despite widespread political consensus on this issue, the PN has – according to one of its European election candidates – surprisingly reopened the discussion on further EU tax harmonisation. The question arises naturally: why has the party felt compelled to re-examine its position?

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