The good news is that it is only a few Maltese who lack values and will do anything for money. Most Maltese are good-natured, law-abiding, good Christians with a very strong set of values.

The bad news is that the few Maltese with no values or with rotten values either lead our political parties or are oligarchical in their approach to the national economy and the sharing of the wealth that is currently being created. The major part of this wealth (circa 90 per cent) is in the hands of these few greedy souls, and our trade unions and party faithful stay silent.

Yet, in the last week, there have been a growing number of thinkers, writers, commentators and organisers of conferences holding speeches and writing commentaries and letters all converging on to a common theme. They are all converging to the concept and, to the criticism thereof, that the present government and oligarchs close to the government have lost all interest in common values to mankind in their wild gold rush, leaving behind the majority of Maltese wage earners, government employees, pensioners, farmers, fishermen and small shopkeepers.

In a couple of articles written earlier this year, especially in my vision for Malta to become a Republic of Light, I had indicated the basic immoral and unethical basis upon which our taxation system is built. Our financial services industry, gambling industry, passport sales to multi-millionaires, tax evaders and money launderers, and our system to attract foreigners to retire in Malta on low taxation of remitted incomes rather than low taxation on all their income have all caused damage to our reputation because of the weak or inefficient controls and the political scandals exposed by the Panama and Paradise Papers.

It’s true that all these activities were introduced, for the most part, by the former Nationalist governments, but were added to by the present Labour government. What was fundamentally unethical had been quite strictly administered under the Nationalists and, for this reason they managed to avoid too many reputational issues and undue scrutiny.

Under the present valueless and greedy pack of politicians supposedly governing the country, but in reality just letting oligarchs and party financers and sycophants get away with everything, including the rape of our towns, cities, skyscapes, landscapes, natural sites and historic sites and buildings, we have seen scandals, Panama Papers, blacked out contracts of shady sales of power stations, lease of gas tankers, gas purchasing deals, sales or giveaways of hospitals with obvious money scams and robbery, land grabs in Pembroke, Żonqor Point, St George’s Bay and  Bulebel.

Emasculation and takeovers of the Police Force, the Armed Forces, control bodies such as the FIAU and MFSA, the Planning Authority and the National Commission for Further and Higher Education have all contributed to the loss of controls and the breakdown of the rule of law.

It is therefore for these and other reasons, including political decisions to veto an EU adoption of a common tax base or a Council of Europe Convention on Illegal Gambling, that have contributed to the loss of reputation and the increase in the levels of scrutiny by governments, tax authorities, parliaments and the media on activities in Malta.

From the act of scrutinising it is only a short step to the taking of action to counter the inequalities and illegalities, as well as the unethical behaviour of our country.

The OECH has issued a report against our passport scheme (as well as the schemes of other countries, to be honest). Maltese directors of large banks, heads of auditing companies and representatives of political parties as well as of the Church have all warned against the inattention to the poor and the excessive benefits being made by the very rich.

Businessmen, in construction or in financing of big projects in destruction of our heritage or in the building of the Great Wall of Malta (more about this wall later), boast that, while in the past, they usually would make around a few hundred thousand or close to a million euros a year, they are now making at least tens of millions if not hundreds of millions a year. On the other hand employees, teachers, small traders and shopkeepers and pensioners are hardly making ends meet.

Other actions have been taken by Denmark, Sweden and others on the licensing and taxing of betting and gambling sales to their own citizens. The European Parliament has issued a very damning report on the Malta situation, the European Commission is looking at the continued licensing of the infamous and secretive (fly by night with incriminating documents) Pilatus Bank. Paradise Papers and Panama Papers name and shame us.

The European Parliament in committee stage has just voted by 39 to 11 in favour of a common tax base across Europe and for a standard Europe-wide corporation tax.

Now the latest action is being proposed by the Minister of Finance of Sweden, Magdalena Andersson. She has been interviewed by the Swedish National TV Channel and said: “It is obvious that it worries very many people that some citizens use tax planning to try to avoid paying tax. It is a central feature of our Swedish model that everybody pays the tax due by them.”

She has just sent to the stakeholders in her country a proposal for a Bill that would, in 2019, eliminate Malta from the White List of acceptable taxation systems and place it into the Black List, in so far as letterbox companies and companies set up with minimal presence but no real activities in Malta, are concerned. This would make these 1,000 Swedish companies liable to tax in Sweden in spite of their having set up house in ‘shady Malta’. Is this where the famous ‘Welcome to Sunny Malta’ has degenerated to.

Now scrutiny is over and our neighbours, who welcomed us into the EU as friends and colleagues in 2004, have had enough. They are moving to action

For the Swedish Parliament it now remains to define what is a letterbox company and what is an acceptable level of presence and activity in Malta to allow these companies to be taxed in Malta through the refund and imputation systems and what is not, and as such liable to full Swedish tax and probably penalties for tax evasion and maybe even imprisonment for the wrongdoers.

Escaping national tax through artificial schemes is outside the set of values of civilised countries. Aiding and abetting of such evasion and breaches of the common value system is very damaging. And yet, both our political parties vow to defend our Maltese tax system.

If Sweden gets this blacklisting through its Parliament, I am sure that a number of well-known and recently named in Swedish press, wealthy financial magnates from Sweden, will be putting their house in order and maybe slightly quaking in their shoes. Will the Maltese Prime Minister and his Finance Minister be able or sufficiently sly to protect them from the tentacles of their legitimate government and the ire of their fellow citizens back home in Valhalla?

If the Swedish owners of these 1,000 letterbox companies and their advisers are worried, what will the other owners of similar letterbox companies from other countries do? It is only a matter of time when scrutiny from their own press and authorities lead Germany, France, Italy, South Africa, Denmark, Finland, Belgium, Netherlands and others to copy the Swedes and blacklist Malta and eliminate one part of our financial system – the letterbox company scam.

And then?

That is why I welcome the current debate going on in Malta about the forgotten Maltese majority and the complete neglect of their needs by the government and developers, by investors and oligarchs.

The recent declaration by the Finance Minister of Malta to revise and strengthen the rules and controls of the financial services sector is very welcome. He seems to be listening. The change in the leadership of the sector is welcome too.

However, the other institutions, from the Police and Armed Forces, from the FIAU and the Planning Authority, as well as the central ministries around the leadership of our country, need changes too. The reputation is so far gone down the drain. What became an interest in ‘Shady Malta’, turned, after the Panama Papers, to criticism. Then ‘Shady Malta’ became the subject of newspaper articles, TV reportages, interviews and severe scrutiny. Of course, here at home, we had Daphne’s investigative journalism, leading the drive to warn our leaders to change tack. They not only ignored her warnings but oversaw the system and the government under whose watch she was brutally murdered for her having expressed herself.

Now scrutiny is over and our neighbours, who welcomed us into the EU as friends and colleagues in 2004, have had enough. They are moving to action. Actions that will damage us severely if we do not make the necessary root and branch changes that are needed.

Apologists and Twitter and Facebook defences of the status quo will not do anymore. That time is long past. The situation is desperate. It is time to take Malta out of this crash course and place it back on the virtuous tracks along with countries sharing the same values travel. We have derailed off those tracks.

Unfortunately, reverting to an honest business model would entail a temporary slowing down and cooling off of our overspeeding and overheating economy. Adding other shady business ideas such as Bitcoin or marijuana factories under the pretext of medicinal cannabis only continue to push our beloved country deeper and deeper into the shadows.

What we need are properly controlled and ‘real’ businesses establishing Maltese factories, offices and research centres in exchange for a relatively low tax level of between 15 per cent and 20 per cent without refunds or imputation. What we need are foreign residents who come to live among us paying relatively low tax of between 15 per cent and 18 per cent on their worldwide revenues. What we need is to ensure that any passport buyer actually lives in Malta for one year before acquiring the passport and paying full Maltese tax like all other Maltese residents on their world income.

John Vassallo is a former Senior Counsel and Director for EU Affairs at General Electric, a former Vice President EU Affairs and Associate General Counsel Microsoft and a former Ambassador of Malta to the EU.

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