Watch: Tax competition compensates disadvantaged EU small states – Alfred Sant
The Head of the Maltese Labour Delegation at the European Parliament, Alfred Sant, said that tax competition is needed by peripheral and island states unless there is compensatory mechanism to compensate them for the fact that they don’t have the endowments that other countries have. “Where competitive disadvantages exist, these have to be taken into account on a systemic basis. At present the only way by which they can compensate for that is through tax competition,” Dr Sant said.
He was addressing the ECON Committee in Brussels during an exchange of views on thereport “Bringing transparency, coordination and convergence to Corporate Tax policies in the Union”. The report favours tax harmonisation that goes against the interests of Malta and other EU islands and peripheral regions.
Dr Sant said that the situation of peripheral and island regions or states and how they are going to keep a competitive advantage over other countries and regions have to be kept in mind with regards to the convergence on tax policies between national states and member states. Peripheral regions and island states have already accepted to remove barriers, free trade, stringent state aid rules, VAT convergence and the budgetary 2 Pack and 6 Pack- programs. Dr Sant argued that now, the margins for flexibility for islands and peripheral states arereally very reduced, especially if these don’t have the endowments that other bigger states have.
Dr Sant said that it is very important to have transparency in tax arrangements and tax policies. However if convergence is pushed through, peripheral regions and island states should still be able to compete in a transparent way across the common market.
Dr Sant’s sentiments were echoed by other MEPs from Cyprus, Sardegna and Ireland. This report is expected to be brought for approval in the European Parliament in December 2015.
