The European Parliament approved the Financial Transactions Tax (FTT) on 23 May 2012, and proposed to implement tax rates of 0.1% for transactions of shares and bonds and of 0.01% for derivatives by 2015.
At the debate, Maltese MEPs voted against the resolution in favour of the FTT due to concerns that such a tax would discourage financial services firms from operating within the EU. On the same day Prime Minister Lawrence Gonzi re-affirmed Malta’s opposition to the proposed introduction of the FTT on an EU-wide basis.
It is the considered view of a number of Maltese experts that the introduction of the proposed tax, whilst undermining the efforts of Malta to establish itself as an international financial centre – will in real terms not bring about the results which the European Parliament considers desirable. Indeed – there are less intrusive and more efficient measures that can be taken to achieve these aims, comments Camilleri Preziosi Partner, Louis de Gabriele.
Malta has been experiencing significant growth in its financial services sector over the last years, with the industry presently contributing more than 12% of Malta’s GDP. The number of funds which are registered in Malta stood at slightly more than 200 in 2006 and increased over the next 5 years to 519 as at June 2011. The Maltese Government aims to further strengthen Malta as financial services centre and to retain its favourable legal and regulatory environment.
EU member states having established and growing financial services industries like Malta will continue to oppose the introduction of this tax.