Press Release No. 18/363

IMF Publishes Fiscal Transparency Evaluation for Malta

September 27, 2018

The International Monetary Fund (IMF) has today published a Fiscal Transparency Evaluation report for Malta. The report assesses Malta’s fiscal transparency practices against the standards set out in the IMF’s Fiscal Transparency Code and was carried out in May 2018 by the IMF’s Fiscal Affairs Department. The Government of Malta requested the evaluation.

The report found that many elements of sound fiscal transparency practices are in place in Malta. Assessed against the standards of the Fiscal Transparency Code, the report found that Malta meets the standard of good or advanced level practice on 21 out of 35 principles in the IMF’s Fiscal Transparency Code, and the basic practice on a further 12 principles.

The report recognizes several key strengths of fiscal transparency practices in Malta. For example, fiscal reports cover all general government entities and are published in a frequent and timely manner. Budget documentation provides a medium-term perspective to fiscal planning, which is subject to scrutiny by an independent fiscal council, and clear fiscal policy objectives are embedded in legislation. In addition, the government discloses and assesses macroeconomic risks to the fiscal outlook as well as reports comprehensively on risks to the government’s debt portfolio.

At the same time, the evaluation highlights a number of areas where Malta’s fiscal transparency practices could be further improved. There is a need for a fiscal report that provides a consolidated view of the performance of the public corporation sector, while tax expenditures could be more comprehensively reported. Budget documentation could also provide more information on the performance of budget entities as well as more comprehensive information on revenue and expenditures of extrabudgetary units, and on public investment projects. Finally, a summary report should discuss risks to the fiscal forecast beyond macroeconomic risks.

Key recommendations of the report to further improve fiscal transparency practices in Malta include:

· Gradually expanding the institutional coverage of fiscal reports to the public sector;

· Publishing a regular report on tax expenditures;

· Presenting more comprehensive information on extrabudgetary units and performance information in the budget documentation;

· Harmonizing and consolidating presentations of macroeconomic and fiscal forecasts in different reports;

· Strengthening the framework for reporting on and managing public investment;

· Publishing an annual fiscal risk statement that discusses the size and nature of specific fiscal risks, and measures to mitigate these risks; and

· Establishing centralized oversight arrangements for public corporations based on a common ownership policy and performance monitoring cycle.

Further information about the IMF’s Fiscal Transparency Code and Maltese Fiscal Transparency Evaluation can be found at: http://www.imf.org/external/np/fad/trans/