Fenech accuses Labour of confusing VAT returns issue

Finance Minister Tonio Fenech has denied claims by his Labour shadow that over 4,000 businesspeople had not been sent their VAT returns.

Fenech said the VAT department denied the allegation, saying that Karmenu Vella had mixed up the retailers whose VAT returns are due for the January-March period in May, and those whose returns for March-May are due in July.

“This inconsistency proves clearly how Vella’s statement is based on incorrect information and that the Opposition is inventing its figures,” Fenech said.

Vella said that the VAT department had failed to issue over 4,000 return forms that had to be mailed back to the department by May 2011. He claimed the department issued assessments and tax statements to the taxpayers, informing them that they would be subject to penalties if they do not send their VAT return in time.

Fenech responded to the accusations by publishing the VAT department’s estimated assessment forms that are issuing automatically by the department’s computer system. “This automatic process has long existed and everybody knows the estimated assessment is cancelled immediately once a return is sent in. Vat-registered people receive this assessment but not because they haven’t yet sent in their VAT returns

Fenech also issued two screenshots of the VAT department’s computerized system, indicating the audit trail of those whose returns were submitted to the department.

VAT returns are first printed by the department and then mailed out to businesspeople six weeks before the deadline for the submission of the returns. Those which close on 15 May amount to 11,379 returns, and were printed on 30 March. Another 9,250 forms were printed on 1 June and sent out that same week.

The VAT department also received 115 objections every month in the last three months.

In a reaction, Labour MP Karmenu Vella accused the government of peddling dishonesty over the Vat department saga. “This government’s answer shows the sort of level of dishonesty it is capable of. It is contradicting what is clearly true,

Vella said that honest were making good for the government’s incompetence and the inefficiences of the VAT department after the finance ministry had already received serious warnings from the Auditor General.

“Instead of admitting to its mistake, Gonzi’s government persists in erring again in this matter. This government has reached rock-bottom,” Vella said.