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By a staff reporter
The Government’s stand so far that it knew of the existence of undeclared cash held by citizens but did nothing about it until very late in the day, can be described as the classical example of inertia.
Although last week, the government moved with its sole partner so far the Central Bank, on the concession for registration of funds, the other stakeholders understood that the decision, albeit good is simply not enough.
In fact, this newspaper is informed that a meeting was held on Monday between the Central Bank and the financial community on the issue of excess cash hoarding. However, the Prime and Minister of Finance or his substitute the Parliamentary Secretary for Finance did not attend the meeting.
Morever, the establishment’s representative was only in the figure of a high but not top CBM official. Both the governor and his deputy were conspicuous by their absence.
The well-attended meeting held on the first day of the open season to register undeclared cash kicked off with a presentation, which was quickly followed by a volley of questions asked, and scarce answers available.
Financial intermediaries asked why this amnesty was aimed at hoarded Maltese Lira and Euro currency. The government should know that there are unexplained funds changed into Bonds and shares of which the owners wish to regularize their position. The answer given was impractical. Financial advisors were asked to sell the bonds and shares, turn them to cash than register them.
The financial community explained that this would negatively affect the stock exchange. The CBM made it clear that the amnesty is after cash and not after undeclared foreign deposits as for these there were other amnesties and repatriation schemes given in the past.
Stockbrokers raised the issue that they do not have the tools to verify at first hand any hoarded cash from clients ending up in their offices. Much less do they have the same security arrangements as banks have in place.
Although they do earn some money for the effort, surely a capping of Lm125 does not justify risks, and security. With a number of false Euros in circulation stockbrokers do not have the means to go after false Euro notes. All agreed that funds are to be deposited by next day at a bank or even if deposited by the latter to be held by the CBM. No interest shall accrue in the first year.
The financial intermediaries were then distributed with the documentation that needs to be filled up and immediately a misprint was identified and it was agreed that this should be corrected.
The financial community sent the message to government to go back to the drawing board and amend the legal notice to cover the funds held as bonds and that the time period should be extended till at least October. The financial intermediaries requested the banks to give them forms for these to be filled up at their premises. After some debate this was agreed to in principle
Clarification of extra funds registered resulting from various forms of the earning tool was given. Any one who has avoided paying VAT is not covered by the tax caveat and if the excess cash results from this undeclared fiscal act than it has to be registered.
Yet again, the government is turning over to the hands of small practitioners, and it is asking them to go along with a current road map but the visibility is blurred. |
