Tax departments merger plans on target - finance minister

The merger projects between the three current Departments of Inland Revenue, VAT, and Customs is moving as planned, finance minister Edward Scicluna said.

He explained that regular meetings are being held between the Commissioner for Revenue and the respective Director Generals of each Department.

Speaking during the opening address of a conference organised by the Malta Institute of Management (MIM) titled 'VAT and the EU', on Friday, Scicluna said that a number of sub-projects pertaining to the merger are already underway.

 "Once the merger kicks in all the investigative functions, which span VAT, Income Tax, and Stamp Duty, will fall under the Audits and Investigations function, headed by one Director General. This should increase compliance control as a result of the available information and knowledge sharing," Scicluna said.

The minister noted that the European Commission is in the process of proposing ways to simplify the European VAT System to make it more resilient and adapted to today's needs, with a goal to alleviate burdens and to encourage cross-border trading without unnecessary bureaucratic rules, while at the same time increasing the fight against VAT fraud and evasion, which is causing losses in the revenue of Member States running into billions.

"Malta is participating actively in this process and welcomes measures that would eliminate unnecessary obstacles for businesses to allow them to grow for the benefit of the economy," the minister said.

Scicluna added that in line with Government's electoral programme, action is already underway to implement measures that would ensure a fairer treatment particularly where a taxpayer has found himself in difficulty to honour his VAT obligations.

He noted that through a Bill currently before House of Representatives, the Minister shall have the power to change the rate of interest applicable on late VAT payments, a threshold for 'late' registration is to be introduced and amendments to the criminal sanctions including a revision of fines where a person fails to submit a VAT return or fails to pay the VAT declared in a VAT return will ensure a fairer treatment. Subsequently important changes to the rules for the appropriation of VAT payments are to be introduced.

Scicluna stressed that Malta's objectives are in line with the EU objectives, in that the Government want to encourage trade, let our economy grow and increase job opportunities for our citizens. Simplification of tax regimes could therefore serve to remove unnecessary burdens which in turn, could trigger more investment.