Matthew Vella
A tax amnesty for defaulters launched in September last year has netted €2.57 million in payments in three months, and is expected to close on 22 February.
As things stand, the net revenue is a far cry from expectations that the amnesty would go some way into cutting €600 million in tax arrears, which was the reason Finance Minister Tonio Fenech had launched the amnesty.
The scheme offers a 90% reduction on the fines and accrued interest on tax owed to the Inland Revenue Department. Defaulters must pay the reduced amount in full and give up any objections or claims against the department. Others with arrears that pre-date 1998 can pay 75% of the total amount due.
Fenech had claimed the scheme was necessary to shore up as much unpaid tax as possible, which he claimed was as much as €600 million in tax, penalties and accrued interest.
But both the Labour Party and Alternattiva Demokratika had raised doubts on the amnesty. Shadow Finance Minister Charles Mangion poured cold water over Fenech’s claims, saying the real figure owed by tax defaulters is around €128 million, while the rest was made up of ex officio tax assessments, penalties, and even assessments on defunct companies that were never wound up.
Alternattiva Demokratika also asked whether the scheme was primarily aimed at accommodating particular business interests. “While incentives for on-time payment should be encouraged, government’s aim should be to collect the actual payments due rather than impose over-the-top fines, which sometimes make it impossible for even the actual payments due to be honoured.”
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