30 August - 5 September 2001

Lm1bn estimated to be invested abroad by Maltese

by Ivan Brincat

Finance Minister John Dalli yesterday said he estimated that up to Lm1bn could be invested abroad by Maltese and this money was not declared.
He was speaking at the launch of a scheme aimed at encouraging Maltese citizens to bring back their investments to Malta and to regularise their financial positions.
The government will be launching the scheme on 1 September and it will run till December 2002.
The scheme will enable Maltese citizens with funds abroad to deposit them with Maltese banks or financial agents without the need to inform the government or the central bank so long as they pay the 15 per cent withholding tax.
They will be given a certificate which can be used if there is a query regarding the origin of the money from the Department of Inland
Revenue.
This means that if Maltese citizens who bring back money to Malta use it to invest in property or to buy other things, the certificate would be good enough as proof for the Department of Tax as to the source of income.
Mr Dalli said it is now common practice that every country gives information regarding the deposits of foreign citizens in their country. This is being done to combat money laundering as well as for taxation purposes. This means that the Maltese government has the capability to know all the details of Maltese who have investments or deposits abroad.
He said the government was already aware that there were foreign banks who were informing their clients that they would have to divulge their details.
Mr Dalli said the Maltese system of banking secrecy, unanimously approved in Parliament, with 15 per cent witholding tax on interest ensures that Malta is the best place to invest money and ensure banking secrecy.
He said the government wanted the money invested abroad to return back to Malta. “To do this, we are launching a scheme which hastens the repatriation process and ensures that negative consequences are avoided.”
Mr Dalli said details of the scheme are still being discussed. Amendments to the law will also be made with regards to exchange control and to taxation.
People with very small amounts such as students who open accounts abroad to be able to study will not be affected, Mr Dalli said.