CITIZENSHIP: Small EU states need tax competition measures and golden passports – Sant

Labour MEP Alfred Sant voted in favour of a European Parliament report calling for the control of abusive tax avoidance, but said small member states needed tax competition to overcome their competitive disadvantages.

The report was supported by a majority of the European Parliament, 465 votes, including by all Maltese MEPs.

The head of the Labour delegation voted in favour of the report on the lessons learnt from the Pandora Papers, supporting aims to control illicit state and corporate practices that enable firms, wealthy or well-connected individuals to abusively amass wealth and avoid paying taxes.

Sant however expressed reservations with the bias in the report that considers tax competition as an inherently bad thing. “Tax competition measures are an essential tool for some Member States to compensate for a lack of endowments and/or economic handicaps that place them at a competitive disadvantage,” he said.

The Pandora Papers were the largest trove of leaked data about the hidden wealth, tax avoidance and money laundering of and by the world’s rich and powerful. This leaked data was revealed on 3 October 2021 by the  the International Consortium of Investigative Journalists (ICIJ). The Pandora Papers showed how high-net-worth individuals are assisted by intermediaries to shield income and assets from fair taxation and scrutiny.

Labour MEP Alfred Sant strongly disagreed with the report’s reference to so-called golden passports as “objectionable from an ethical, legal and economic point of view”. He admitted that while he has reservations about the way golden passports are used, these are not on the grounds mentioned.

Sant said such measures were totally legitimate and have been and are still being applied in different ways by major European member states and the United States. “It was only when smaller states also adopted the practice that objections began to be raised,” he said.