It took a long time to be drawn up, but it is finally here.

The government last week announced that it will be dishing out some Lm17 million (EUR 39.6m) in delayed tax refunds under a new scheme. A total of 21,541 companies and private citizens will be reimbursed the extra tax they paid before the 1999 switchover to a computerised system.

Since then, the tax collection system has been kept up to date, with all taxpayers knowing where they stand with the government each time they fill out their income tax return. What needs to be sorted out now are the arrears due before that date.

It has taken almost a decade to come up with the scheme, which will see the government paying up its dues within a maximum 28-month period. Some 4,000 people/companies will be getting their due by the end of the year, while the rest will be receiving the payment in two or three instalments, the first payable at the end of this year, the second at the end of 2008 and the other a year later.

But it has finally been drawn up. Government detractors, including the Malta Labour Party, will consider this as an election gimmick. With a few months to go for the next general election, such a move can be interpreted as being one to attract some votes. Receiving a cheque from the government always increases the feel-good factor, and the fact that this will arrive at Christmas – a time for celebration and, this year, a time when the election will be closer – will give a slight advantage to the government.

On the other hand, it must also be admitted that people today decide which party they will vote for on a much wider array of subjects. In a nutshell, Labourites will not vote PN just because they got some of their money back, money that was due to them 10 years ago or more and the value of which is today less, especially considering that there will be no interest paid.

It is therefore hard to believe that the government’s intentions were to gain political mileage. It just wanted to wipe the slate clean. Considering that for the past seven years the collection of taxes due has been simplified to such an extent that people know exactly what they have to do – and pay up their arrears or receive a cheque to reimburse the extra income tax they had paid immediately – it was pretty obvious that sooner or later the government had to sort out what was left from the pre-computerisation era.

Once this scheme is over – and most of the money will be distributed by a new government anyway – the Inland Revenue Department will only need to concentrate on the current taxation process, and this will no doubt make it even more efficient than it has become of late.

What is perhaps questionable is why will it take the government so long to finish the process of reimbursing citizens and companies who have been waiting for their dues for 10 years or more. One understands the government’s financial constraints and, after all, Lm17 million is not a little money. But at the same time, one would have expected the government to complete the scheme well before the end of 2009.

Although it would have been far better for these people and companies to receive interest on the money they have been owed for more than 10 years, at least the government has bound itself to pay any interest due if the deadlines for the payments to be made are not met.

In this way, the Inland Revenue Department will do its utmost to meet the time limit established.