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I refer to the article on the front page of last Sunday’s issue of MaltaToday bearing the above title. I would have thought that prior to commenting with such prominence on the VAT statistics released in parliament recently, you would have taken the time to do some simple homework. I am sure that with more homework your conclusion - that serious doubts have arisen as to how effective enforcement is in Gozo - would not have been irrelevantly jumped at !
I assume that what distinguishes a Gozitan business from any other business is obviously the address shown on its VAT return and therefore I presume the data presented in parliament was filtered in accordance to this address. This renders the statistics very misleading and gives way to gross misinterpretations, knowing that it is normal practice for companies to register VAT numbers at their head office address, and not on the address where an activity is being generated.
I think it would be very interesting if similar statistics were to be released in parliament, showing VAT payments per district, or why not, by locality! Just think about how irrelevant this data would be in enabling anyone to assess, whether in a certain district enforcement is effective or otherwise. For example, imagine what a difference it would make to a district if a large entity, such as Maltacom or Enemalta, just to mention a few, had its registered office within it. Such entities give a service to the whole of Malta and Gozo, however their VAT reporting is certainly accounted for at its entirety under one district, presumably the head office address. The average VAT paid per business in this district would be relatively high and interpreted literally one may jump to conclude that tax enforcement is at its best in this district, when it is obvious that this is not the case, and what’s more important is that the data can never be used to assess tax evasion or otherwise.
There are also many groups of companies that own businesses spread all over Malta and Gozo, but whose head office is centralised in one particular locality, therefore the address shown on their VAT return has nothing to do with the place of business from which that VAT was collected! I know of various companies that operate in Gozo and who together generate millions of liri in turnover, but whose official base is in Malta. Does the VAT paid by these companies feature in the Lm 1,062,850 being quoted ?
One could even expand further. What if in a certain district, there is a concentration of fishermen and farmers, who do not pay VAT but on the contrary recover VAT on their expenditure ? What if in a certain district, tourism represents a high proportion of overall activities? How would the 5 per cent VAT paid by hotels compare with other districts whose main activities attract 18 per cent VAT?
It is to be made very clear that I am not in favour of tax evasion, whether in Gozo or in Malta, and I welcome the measures taken by the authorities to curb such abuse. However, raising doubts based on statistics that are misleading complemented with the fact that such statistics are only presented for just one sector of the country, leaves serious doubts as to the real intentions behind such actions
Certainly as a Gozitan I would prefer it if, instead of wasting time with the presentation of baseless statistics with hidden agendas, our MP’s use their energy and resources to address more serious problems on the island of Gozo. At the very least, finishing the pending works at the Mgarr harbour and finding a solution to the indefinitely suspended helicopter service would be very much appreciated.
Stephanie Buttigieg
Nadur
Gozo
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