Economist Krugman, NYT Highlight Malta's Role in Global Tax Avoidance
In brief
- Nobel laureate Paul Krugman described Malta as facilitating a 'downward spiral of oligarchy' due to its role as a tax haven.
- The New York Times reported that major auditing firms are actively designing tax avoidance schemes for US corporations using Malta.
- These schemes allow large US companies to shift profits to Malta, significantly reducing their tax obligations.
Malta's role in the global economy has come under scrutiny, with Nobel laureate economist Paul Krugman describing it as a facilitator of a "downward spiral of oligarchy" due to its function as a tax haven. This assessment was made in a video shared earlier this week.
Krugman highlighted Malta's "remarkable role" in the world economy, though his description was not intended to be flattering. He argued that by acting as a tax haven for multinational corporations, Malta contributes to a system that benefits a select few.
Adding to this, an investigation by The New York Times, as reported by The Shift News, revealed that the world's largest auditing and accounting firms are actively involved in Malta. These firms, known as the "Big Four"—KPMG, PwC, Deloitte, and EY—are said to be designing and marketing tax structures.
These structures are specifically created to allow major US corporations to shift their profits to Malta. The primary goal of these schemes is to reduce the tax bills of these large companies.
The presence of these global auditing giants in Malta and their reported activities underscore the country's position within international financial systems. The investigation suggests a deliberate strategy to leverage Malta's tax framework for corporate benefit.
Newsbook and The Shift News both covered these developments, bringing attention to the economic practices and their broader implications for global wealth distribution and governance.
The Spin Room
Low media divide. Both independent outlets reported on the critical assessments of Malta's role in global tax avoidance without notable framing differences.