Council payments not covered by VAT receipts total €699,191

Payments reaching almost €700,000 paid to  26 different local councils in 2015 were not accompanied by a proper fiscal receipt, according to information provided to this newspaper by the National Audit Office (NAO).

The amount could be even higher as the amounts only comprise “instances encountered during a sample testing”, a spokesperson for the NAO said, in reply to questions by MaltaToday.

This represents more than twice the amount of irregular payments flagged by NAO last year when payments not accompanied by a proper receipt totalled €340,000, down from €1.6 million in 2014.

Top 5 defaulting councils:

St Paul’s Bay     €162,543
Ghajnsielem       €154,902
Xaghra               €68,304
Mgarr                 €38,332
Mdina                 €34,123

For the third consecutive year the NAO’s report on local government flags instances where substantial amounts of expenditure incurred for the councils’ operations was not supported by a valid fiscal receipt, even though the respective service provider did not qualify for the exemption under the pertinent legislation. 

Moreover, in a number of cases, “procurement was only supported by an unofficial piece of paper”. In such instances, it could not be ascertained that the respective expenditure was actually incurred for the running of the council.

At times, even the invoice submitted by the supplier lacked necessary details, such as details of the supplier, and identification of the client. 

The NAO insists that an invoice, as well as fiscal receipts, be obtained for all the expenditures incurred by councils. 

In cases where the supplier lacks adherence to VAT regulations, the council is to “discontinue procuring from such defaulter until the situation is rectified”.

In this year’s report the council reporting the largest amount of payments not accompanied by a receipt was St Paul’s Bay (€162,531) followed by Ghajnsielem (€154,902) and Mosta (€74,287). 

In its reply to NAO the St Paul’s Bay council has promised that it will be adopting a system whereby no payments will be issued unless a fiscal receipt has been issued for the previous payment. The Ghajnsielem council has also promised to “put in place a system whereby staff will start chasing suppliers who do not provide a VAT fiscal receipt”. The Mosta council claimed that it does its utmost to obtain fiscal receipts from suppliers and has promised to report anyone who fails to submit a fiscal receipt to the VAT Department.