The Malta Independent 14 April 2024, Sunday
View E-Paper

Relaxation in payment conditions for VAT defaulters announced

Malta Independent Wednesday, 5 June 2013, 13:03 Last update: about 11 years ago

Finance Minister Edward Scicluna today announced a series of measures intended to make it easier for individuals and companies with pending VAT bills, to regularise their position.

During a news conference at the end of a visit at the VAT Department in Birkirkara he said that the intention behind these changes is to take a more ‘rational and humane’ approach in tax collection.  

The finance minister was flanked by the new commissioner for revenue Marvin Gaerty and by Charles Vella, the director-general of the VAT department.  Prof Scicluna said that the process of merging these  departments with the custom department into a single entity has already started.

These measures include a reduction in interest rates from 9 percent to 6.5 percent per year, the elimination of a daily fine of €15 and the winding up of an amnesty scheme announced in the 2012 budget. The finance minister made the point that this scheme will not be extended, but simply giving the opportunity to those who were eligible back then, to benefit from it.

It was also announced that contrary to the current mechanism, payments will go directly to cut down the tax bill and only after that toward fines and interest.

Another measure in the pipeline is to cap fines for late VAT registrations.

The finance minister remarked that another issue which government is looking into is the accumulation of interest during the course of an investigation. He said that it is unfair when individuals or companies who are found guilty, end up paying extra money simply because the department took very long to conclude its investigation.

Prof Scicluna said that this year the estimated revenue of the VAT is of €580 million.  Asked by this portal whether these measures will have an overall impact on this figure, he said that “it is likely that revenue will increase as those defaulting on VAT payments are being encouraged to come forward”.

Replying to another question the finance minister excluded the possibility of raising the VAT rate, even though Malta is facing the excessive deficit procedure from the EU Commission. On the other hand he said that the economy is showing positive signs, pointing out that VAT revenue in May increased. He said that after several months of economic slowdown due to political instability, consumption is on the increase resulting in greater economic activity.

While some of these changes can be implemented immediately, others warrant a legal notice or law amendments. According to the finance minister these amendments are being drafted and will be tabled in parliament in the coming weeks.

It was also announced that the VAT Department is in the process of revamping its website to make it more user friendly to customers.

  • don't miss