The government is set to dish out some Lm17 million (EUR39.60) in delayed tax refunds under a new scheme which will see a total of 21,541 companies and private citizens reimbursed for excess taxes they paid prior to the 1999 switchover to the computerised system.

At a news conference given yesterday at the Inland Revenue Department, parliamentary secretary Tonio Fenech said the move was in line with what was announced in the last budget. Mr Fenech said that all those concerned would be notified of the amount they were to receive and when they would receive it.

He said that the mentality of “you know when you paid, but you don’t know when you will get paid” will be eradicated. He explained that although the taxman was not obliged to pay interest on refunds, the department would bind itself to pay out interest for refunds due from before 1998 if that amount was not paid out to the individual in question according to the date given to them in the notice which they will receive.

He also explained that apart from the routine yearly refunds, which were now paid out about a month after submission of returns, there would be no back dated records. “Since 1999, we have been up to date. The mission is now to clear out those old files which remained under the manual system prior to the introduction of the FS3 system,” he said.

He conceded that some of the cases date back 10 years.

Mr Fenech explained that apart from a small number of companies which were owed more than Lm10,000 (EUR23,290), everyone who was owed refunds would receive the full amount owed within 28 months. He said that in all cases, the first instalment of payment would be received by the end of this year.

“About 4,000 people will receive their refund within four months. About 10,000 will receive their refunds in two instalments, the second of which will be paid no later than 16 months down the line. The remaining 7,000 people and some companies will receive their refunds in three payments, the last of which will be paid within 28 months,” said Mr Fenech.

The Malta Independent pointed out that businesses, particularly small and medium enterprises, were appealing for less bureaucracy and were also crying out for cash liquidity. This newspaper asked Mr Fenech whether he thought 28 months was too long a period for such businesses. He first joked that 28 months was a lot less than 10 years, but proceeded to give a serious answer: “From our records, the ones that are owed more than Lm10,000 (hence payment within 28 months) are larger companies. SMEs mostly fall in the lower brackets and they will be refunded much sooner than that,” he said.

Mr Fenech also said that the department would be embarking on a setting off exercise whereby if people owed money as well as being in line for a return, the calculations would be made to ensure that no doubling up of transactions was made – i.e. cancelling out one against the other.

Mr Fenech said that since 1999, Lm104 million (EUR242.35m) had been paid out in refunds up to 2006 while an additional Lm19 million (EUR44.26m) had been issued in refunds for cases pre-dating 1999.