Malta Must Make Progress On Tax and Competition Says EU

by Robert Lee, Tax-News.com, London

10 June 2003

A monitoring report published by the European Commission on Malta's progress towards preparing for EU accession next year has stated that the country is mostly 'on track', although it suggested that urgent attention is necessary in the areas of taxation and competition.

Despite these shortcomings, Foreign Minister Joe Borg expressed satisfaction at the overall findings of the report, which included evaluations of all ten aspiring EU countries.

"When you compare the conclusions of the reports, we have fared quite well," the Foreign Minister told the Times of Malta. "The reports criticise three particular acceding countries, including Poland, while it gives almost full marks to Slovenia. Malta and some other acceding countries are somewhere in the middle."

Borg insisted that the government has the preparations under control, and that it still has time to meet the deadlines on the chapters of the acquis which require further attention

"One also has to take into account that our parliament did not meet for three months because of the referendum and election campaigns," the Foreign Minister explained, adding that most of the issues highlighted by the EC are related to legislative implementation.

Although the Commission seems generally satisfied that Malta is meeting the requirements which arose from the accession negotiations, there is still much to be done in the sphere of VAT (Value Added Tax). In particular, the EU mentioned increasing administrative capability in relation to customs duties, and the levying of VAT on certain goods that were previously zero-rated.

Regarding competition, the Commission has directed Malta to swiftly expand the scope of the Competition Act to incorporate public undertakings, and expressed concern at the slow pace of this.

Recommended