GUEST POST/PM’s red herring audit is worthless

Sent in by Conservative:

The following is very important in the context of the Prime Minister saying that there will be an audit of Minister Mizzi’s affairs under the exchange of information agreement with New Zealand and that if ‘millions’ or even ‘thousands’ are found in his ‘box’ then he will force him to resign.

The Prime Minister today mentioned, when questioned by a journalists from The Malta Independent, that the audit will be carried out under the agreement Malta has with New Zealand within the OECD ‘document framework’ (the Prime Minister didn’t know the name of the document and said he will find it out).

Prime Minister Muscat also said that exchange of information is not automatic with New Zealand, but on request.

Facts:

Malta is not a member of the OECD; New Zealand is a member.

The OECD’s automatic exchange of information agreement involves the systematic and periodic transmission of ‘bulk’ taxpayer information by the source country to the residence country concerning various categories of income (e.g. dividends, interest, etc.).

It can provide timely information on non-compliance where tax has been evaded either on an investment return or the underlying capital sum, even where tax administrations have had no previous indications of non-compliance.

But in this case the owner of the holdings is a New Zealand trustee company, a New Zealand domiciled and resident company – not a Maltese resident individual or company.

The information available on Minister Mizzi’s trust holdings will relate to a New Zealand resident company and not to a Maltese taxpayer. This means it is not covered by the agreement.

The only asset in the New Zealand trust is shares in the Panama company. But Panama is not a signatory of the OECD agreement and therefore the audit will find that there is nothing in the trust and that it is not true that there are either ‘thousands’ or ‘millions’.

Even with the individual’s consent, Panama will not accept to disclose any information to third parties.

All of this is a red herring. The ‘audit’ is worthless – waste of time and more taxpayer money.