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Country Rankings - Malta

  • Nov 30, 2015   Malta: proactive

    Malta is the smallest economy in the euro zone, yet is has come through the European economic storm in much better shape than many of its more economically powerful fellow member states, and this despite a number of handicaps that might have sunk a country of similar economic stature. For starters, its natural resources are limited, and it imports about 80 percent of its food and most of its energy. And as a small island nation, Malta is highly dependent on foreign trade and relies heavily on tourism. What's more, being situated on the EU's southern periphery, Malta has found itself at the front line of the migration crisis, straining the country's financial resources. However, thanks to its largely sound banking system and efforts to diversify the economy, particularly by embracing e-commerce and e-gaming, Malta avoided the worst effects of the crisis. This has allowed the Government to keep its own debt relatively low, and healthy levels of economic growth have given the Government latitude to cut taxes. Indeed, as noted in the recent assessment of Malta's budgetary plans by the European Commission, personal income tax has been cut in the last three budgets, while the labor tax burden has also fallen. Doubtless aware of its economic vulnerabilities, Malta has been very proactive in the area of taxation, introducing various tax incentive schemes to attract foreign investors, including a citizenship for investment program. Indeed, it has sailed pretty close to the wind as far as the EU is concerned, because member states have to be very careful these days not to fall foul of state aid rules and other laws designed to prevent member states from distorting the sacrosanct single market. Unsurprisingly, the citizenship program did actually attract an investigation by the Commission. MEPs felt that the scheme “abuses" the rights acquired by the island through its EU membership, and undermines "the very concept of European citizenship." But, somewhat surprisingly, to my eyes at least, the scheme was given the all clear in 2013. However, small island states like Malta, devoid of natural resources, have to take a risk now and again to ensure their economic futures, which is why it gets an encomium.
    Source: http://www.lowtax.net/news/European-Commission-Endorses-Maltese-Budget-69720.html

  • Mar 13, 2014   Malta: on the right path

    As usual during this period of fiscal stress for countries across the world, we look in vain for any cuts in taxes. But at least in Malta they are trying to improve matters for businesses through simplification of the tax system and throttling back the impositions of government. As I say that, I can already hear the offended wailings of the anti-brigade: oh, but Malta is offshore, it is a tax haven, it steals revenue from big "respectable" countries like Germany by helping banks and gaming companies with low tax rates, so that they can't get the revenue to help their poor, huddled masses to survive the rigors of the nuclear winter we are all trying to survive. Let's be clear: the "nuclear winter" is a direct result of the debts taken on by those countries' politicians in pursuit of electoral advantage, and their disgraceful use of taxpayers' money to prop up or outright take over their pals' banks which had over-reached themselves, indeed mostly by lending to those selfsame governments. Well, now then, isn't it a strange thing that the countries with the lowest tax rates are the ones with the least debt and the least-burdened citizens? How do you explain the fact that Malta, Ireland, Switzerland, and even debt-challenged Cyprus, not to mention the truly "offshore" European jurisdictions such as the Channel Islands, manage to keep their citizens in the style to which they have become accustomed with national tax takes between 20 percent and 30 percent, while spending behemoths like Germany and the UK struggle to keep their take below 40 percent and still get deeper into debt every year? Not having the OECD's budget, I don't visit all of these countries all of the time, but my personal observations certainly don't support any idea that Brits, Frenchies or Germans are richer or happier than the Maltese or the Swiss. On the contrary: entitlement breeds discontent; nanny government saps willpower and initiative, and when adversity comes, as it has now in Italy and Spain, leaves people without the weapons or the skills or the desire to better themselves. That is the deadly legacy of fifty years of "social partnership," misbegotten daughter of Beveridge and the welfare state. Amazingly, after 100 years of modern economic experience that amply demonstrate the bankruptcy of social welfare philosophy, there isn't even one shred of understanding of these basic home truths about human nature among modern-day European politicians. If anything, we are going in 180 degrees the wrong direction, attempting to preserve an unsustainable set of expensive and ruinous social policies in the face of economic reality. It's a case of mass hysteria, I am afraid, and it's going to end in disaster.
    Source: www.tax-news.com/news/LowTax_Malta_Seeks_To_Lure_Small_Businesses____63958.html

  • Oct 17, 2013   Malta: is the tortoise . . .

    For the European countries which used to make some or all of their living from being "low-tax," which does of course include Switzerland, the EU has always been the elephant in the room, and if Switzerland may by now regret having been ambivalent towards the EU, some other countries which threw in their lot more whole-heartedly with the EU have met with unexpected outcomes. In the case of Cyprus, the initial EU-induced boom has turned to ashes in its mouth; but Malta seems to have gotten everything right, and is carefully building itself into a diversified financial services and e-commerce centre. Its latest wheeze is to create a secondary stock market designed to attract smaller, more entrepreneurial companies; technically it will be known as a Multilateral Trading Facility under the country's investment legislation. Jersey and Guernsey have shown what can be achieved by a tax-efficient boutique-oriented listing exchange: the Channel Islands Stock Exchange (CISX) has operated very successfully in the shadow of London's exchanges, and Malta, with access to "passporting" (i.e. a licensed Maltese financial services provider is able to offer its services across the EU), should be able to do the same.
    Source: www.lowtax.net/asp/story/front/Malta_Seeks_To_Broaden_Financial_Services_Sector____62301.html

  • Jun 20, 2013   Malta: opens its doors

    Malta shares many characteristics with Cyprus: both are sun-soaked ex-British colonies, English-speaking, low-taxing international financial hubs, and both had troublesome transitions into independence before both joining the European Union in 2005 and adopting the euro. But whether by bad luck or bad judgment (actually, a bit of both) Cyprus now finds itself in a parlous situation, while Malta, it seems, can do no wrong. It's latest wheeze is to expand its HINWI (High Net-Worth Individual) scheme offering residence to people who contribute quite a bit to the national exchequer; actually that "quite a bit" now falls to really quite a low level, allowing even a humble scribe like me to qualify. Given Maltese tax rates, the newly-reduced minimum tax contribution of EUR15,000 equates to income of about EUR60,000, and you don't even have to buy a house. Malta is quite crowded, but a flood of incoming semi-wealthy people would do wonders for the construction industry, apart from generating significant tax income. Malta's regime is now much more welcoming than equivalent schemes in other sun-traps. It deserves to succeed.
    Source: www.lowtax.net/asp/story/front/Malta_Revamps_HNWI_Expat_Incentive_Scheme____61036.html

  • Apr 18, 2013   Malta: mistreat China

    One country which is conspicuous by its absence from the TPP talks is of course China. Although there are ongoing negotiations between the Middle Kingdom and various other countries, and China has FTAs with a scattering of other countries, notably including ASEAN and New Zealand, on the whole it is lagging. And it considers itself as an injured party in trade affairs, complaining this week about the level of "dumping" and "counter-vailing" measures it is subject to, particular emanating from the USA. A lot of the problem revolves around the designation of China as a "non-market economy" (NME). For anyone who, like me, finds it extraordinary that China should still be regarded as an NME, a word of explanation is in order: an NME is a country in which the State subsidizes enterprises or indulges in other non-market behaviour, despite WTO rules against it. So, an NME is allowed to cheat, if you will; but the other side of the coin is that for an aggrieved counter-party, the burden of proof is lower in anti-dumping proceedings. China's accession agreement to the WTO allows it to retain NME status only until 2015; but the change is not in China's gift, and both the USA and the EU persist in regarding China as an NME, despite frequent requests from China for them to treat it as a market economy.
    Source: www.lowtax.net/asp/story/front/China_Sees_Itself_Subject_To_Increasing_Trade_Friction____60398.html

  • Dec 06, 2012   Malta: v the EU

    Malta does "get it", and has presented a tax-cutting budgetary package for 2013. Little Malta had a bad period of quasi-Marxist post-colonial blues in the 1970s and 1980s, but managed to pull its socks up and join the EU along with Cyprus and the Eastern European ex-Soviet bloc in 2005. The EU's Code of Conduct Committee (a kind of internal high-taxing, big-nation fiscal police force) then had a go at Malta's low-tax regime, and forced some concessions, but mostly Malta fought its corner very well and managed to retain most of its attraction for corporates, and especially betting and gaming companies. What are you to do if you sit on a piece of rock without even a gold mine? Malta saw early on that its salvation lay in e-commerce, and has done everything right, to the point at which it is now going to be attacked by Brussels for being too successful. The EU is so wrapped up in its euro-zone problems that it may not properly focus on the issue for a while; but the recent Green Paper on gaming is full of menace, and should worry the Maltese authorities big-time.
    Source: http://www.lowtax.net/asp/story/front/Tax_Cuts_Announced_in_Maltas_Budget_for_2013____58539.html

  • Oct 18, 2012   Malta: Malta makes itself conspicuous

    Malta, one of the ten countries which enlarged the EU in 2005, seems to have made a better fist of its natural and artificial advantages than the other sun-soaked ex-British colonies in the Mediterraean, Cyprus and Gibraltar, and now it has launched a neat scheme to encourage retirees to take up residence there. Gibraltar, being so small, can't encourage too many immigrants, so its HINWI scheme is rather aimed at high-earning executives, while Cyprus seems too introverted to focus on specific incentives for immigrants, although with a 5% tax rate for pension income, perhaps it hardly needs to. Where Malta has really shone is in e-commerce, building a formidable position in e-gaming, while Gibraltar seems to have frittered away a good early lead in that sector. Cyprus is a non-starter in the e-commerce stakes, and is still busy trying to pass a law to ban e-gaming rather than encouraging it. Now offshore gas discoveries will allow it to waste the next ten years, just as the housing boom caused it to waste the last ten. Malta has been forced to live off its wits, and is building a secure economic future. No-one could have guessed it 20 years ago.
    Source: http://www.lowtax.net/asp/story/front/Malta_Launches_New_Scheme_To_Lure_Expat_Pensioners____57795.html


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