Dr Alfred Sant, the Head of the Labour Delegation at the European Parliament, has said that tax competition should remain part of the limited array of decision tools available to national economies.
Dr. Alfred Sant was reacting to the 'Report on tax rulings and other measures similar in nature or effect,' which was presented to the European Parliament. In an explanation of vote, Dr. Sant said that he was voting against this report which is proposing measures that implicitly or explicitly promote moves that on an EU wide basis would introduce tax convergence and harmonisation.
"This goes against the interests of smaller economies of the Union, that lack the endowments of the larger economies," emphasised the Maltese MEP.
Dr. Sant had earlier informed the President of the S&D group Gianni Pittella and the S&D co-rapporteur Elisa Ferreira about the vote of the S&D Maltese Delegation. The Maltese MEPs both EPP and S&D voted against this report. The report was voted with 508 votes in favour, 108 against and 85 abstentions.
Dr. Sant said the flexibility of the smaller EU economies in policy making is already constrained among others, by the convergence in VAT rates, state aid rules, the single currency, the six pack/two pack rules applied to their budgets. As a result, structural divergences between parts of the Union have grown, not diminished. Reducing the tax flexibility of such economies would further increase these disparities, which is unfair, dysfunctional and unacceptable.
Dr. Sant agreed with recommendations regarding an improvement in transparency related to the taxation measures applying in EU member states.
"I fully support measures uniquely designed to promote full transparency in national tax treatments. But the report fails to provide a tight definition of fair tax competition, mainly because it is slanted towards a situation in which tax should be harmonised across the EU. 'For these reasons, I have voted against the Report," said Dr. Sant.