Norman Aquilina urges bolder action on tax reform: ‘Let’s level the playing field once and for all’

Farsons Group CEO Norman Aquilina has welcomed the Government’s proposed reforms to Malta’s tax enforcement framework, describing the initiative as “a step in the right direction.” However, he stressed that more far-reaching action is needed if the country is truly committed to fair competition and effective regulation.

His comments follow the tabling of a wide-ranging bill in Parliament aimed at modernising the recovery of tax dues and strengthening the fight against financial crime. The proposed amendments span several key pieces of legislation, including the Income Tax Management Act, the Social Security Act, the VAT Act and the Duty on Documents and Transfers Act. They also grant expanded investigative powers to the Commissioner for Tax and Customs and introduce a formal system for out-of-court settlements, with fines reaching up to €1 million.

Despite welcoming these steps, Mr Aquilina drew attention to what he views as a major oversight: Excise tax enforcement.

“The proposed new legislation overlooks the need to also address excise tax collection. This area remains vulnerable to abuse,” he cautioned. “The current situation allows some operators to exploit weaknesses and avoid paying their fair share of excise tax.”

According to Mr Aquilina, such gaps in enforcement are not just administrative issues – they carry significant consequences for fair market competition and business ethics in Malta. He warned that unless excise tax loopholes are addressed, law-abiding companies will continue to be placed at a disadvantage.

“In ensuring a level playing field, all businesses must operate on an equal footing. Fair competition demands fair taxation and effective enforcement, preventing free riders,” he said. This also entails that “all businesses operate in compliance with their regulatory obligations.”

He further remarked that compliant businesses typically uphold high standards of safety and quality, often going a step further by embracing environmental and social responsibility. Yet these same businesses are often “penalised for playing by the rules, to the benefit of non-compliant operators who gain unfair advantages by evading taxation and skirting regulations.”

The Farsons Group CEO warned that ongoing inaction in this area is undermining the business community’s trust in the system, calling for a legislative and enforcement framework that ensures “all businesses play by the same rules, thereby competing on merit rather than exploiting loopholes along with shortcomings in the system.”

In his closing remarks, Mr Aquilina struck a firm tone: “This requires bold action. Let’s level the playing field once and for all.”