The Malta Independent 25 July 2026, Saturday
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Tax Evasion

Malta Independent Tuesday, 7 June 2005, 00:00 Last update: about 14 years ago

Parliamentary Secretary for the Self-Employed Edwin Vassallo did not beat about the bush when he spoke about tax evasion in Parliament a few days ago.

He said that it is good that the government strengthens its fight against tax evasion, but it is equally important that it sees that the “big fish” are caught first including, he said, foreign commission agents who are operating in Malta illegally without paying VAT or income tax.

What Mr Vassallo said is right.

The problem is that what he said has been said before but it seems that little was done and is being done about it.

Nobody likes to pay tax but everybody has to do it. It is the way we can all contribute towards the administration of the country. It is our duty to pay all the taxes that are due, no matter how much we dislike doing so.

Tax evasion is fraud. It is illegal. And yet, year in year out, successive governments have never got to grips with the situation. They claim that matters have improved and that the battle is being won, but ultimately there is still rampant abuse. The problem remains a big one.

When tax – whether it is VAT, income tax or any other form of tariff – is not paid, the non-payment itself goes against the law but the issue goes beyond that.

That single payment means less money for the government to provide its services, be they health, education, environmental, infrastructural and whatnot.

To the person committing the crime, that single payment might be a small contribution which, in effect, does not change matters much on its own. Yet, counted together, unpaid tax amounts to hundreds of thousands of liri and this does have a bearing on the overall situation.

While single individuals or companies make that little extra profit by not paying their taxes, the country as a whole is suffering the consequences of their illegal behaviour.

What is perhaps more annoying to the ordinary employee is that, while his or her taxes are duly deducted from the gross pay every month or every two weeks – when they get their salary – others who have no fixed income do not pay up what they owe. Or else they do not pay up all that is due. Whatever the tax is, they should be made to pay it.

No system is perfect and there will always be ways to evade paying tax. But the government is duty-bound to see that these loopholes are eliminated.

It does not seem, however, that enough effort is being made in this regard.

Of course, the government will say that there has been a certain degree of success in its drive to combat tax evasion, and that the methods being employed are giving a certain amount of positive results.

But then comes Parliamentary Secretary Vassallo who comes up with such a speech in Parliament. No doubt Mr Vassallo is doing his duty in pushing his own government to get its act together and work harder on this issue.

In his address, Mr Vassallo said that the government had analysed what the effects of increasing the fines for VAT evasion would be.

The thing is that it is often the case that although the law lays down that fines should be paid, the perpetrators – the few that are caught – are let off with a warning.

So what is really the point of increasing the fines that should be paid if one is caught abusing the system if these same fines are not imposed?

The government must work harder in this regard and see that all taxes due are paid, by one and all.

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