Government revenue was far less than was originally projected in 2020 due to the Covid-19 pandemic, a report by the National Audit Office shows.

The Commissioner for Revenue had collected €2,438,628,527, which is more than €790 million less than what was projected in the financial estimates.

In addition, among other things, the amount collected by Customs was also down. It collected €267,359,444, but this was less than the €353,817,000 that was originally projected.

The figures emerged in a report that Auditor General Charles Deguara presented to Speaker of the House Anġlu Farruġia, entitled: 'Ministry for Finance and Employment: An Analysis on Revenue Collection.'

The scope of this analysis, carried out by the Financial and Compliance Section, was to collate and analyse the revenue streams collected by the Office of the Commissioner for Revenue and Customs during 2020.

"As a result of the severe global economic impact of COVID-19 and the ensuing restrictions to mitigate the spread of the pandemic, the anticipated economic goals did not materialise, which situation obviously impacted the forecasted tax revenue collection. This led to a substantial drop in all income streams during 2020, against the upward trends in the preceding four years, from 2016 to 2019. In 2020, a total of €3,770 million was collected from Income Tax, Social Security Contributions, Capital Transfer Duty, Value Added Tax and Customs."

Figures presented by the Commissioner for Revenue showed that during 2020, the gross revenue actually collected from income tax amounted to €1,625,033,787, out of which, the amount of €88,183,057 was paid out as refunds.

In terms of Social Security Contributions, €1.064 was collected, but this was around €85 million less than projected.

The NAO also noted: "VAT income experienced a steady upward trend from 2016 to 2019, with a total increase of €220 million over four years when compared to 2015. On the other hand, €167 million less than the previous year were collected in 2020."

Separately, there was "an overall decrease in absolute terms of €13 million in Duty on Documents and Transfers over the period 2016 to 2020. During the foregoing period, the major increase (26%) was registered in 2018 over the previous year. This was attributed to the various stamp duty relief. However, this growth was offset by the impact of the Covid-19 pandemic in 2020, during which a drastic drop of 34% over the previous year was experienced."

"This analysis also revealed that the most common enforcement tools that were applied to collect outstanding dues essentially consisted of legal action and the remission of interest agreements."

The NAO also commented on the level of enforcement procedures in place in relation to revenue collection, as well as the relative staff complement.

"Considering the special circumstances that affected the year under review, this Office intends to conduct a similar follow-up assignment within a couple of years."

This report, in its entirety, may be accessed through the NAO website: www.nao.gov.mt.