VAT arrears scheme

On July 12, The Times carried a front page report claiming that defaulters have ignored the government scheme to waive penalties for VAT arrears and, with only Lm 2 million having been paid up, a balance of Lm19 million is still outstanding.

It was stated that Parliamentary Secretary Tonio Fenech could not, and I quote, "understand why so many had decided to ignore it".

Is Mr Fenech living on the moon? Is he so detached from the problems businesses are facing? Everyone else is very well aware of the multitude of problems business people in general have to cope with. Not so Mr Fenech, it seems. I will oblige him and tell him exactly why the scheme has flopped.

One of the biggest problems being faced by all businesses is a chronic "cash flow" problem. Hence, the money is simply not available and if arrears are paid up this will only aggravate the situation with a lot of businesses, especially the smaller ones, going under.

It will make much more sense, and bring about far better results, if a scheme is agreed with defaulters to pay arrears by instalments within a specified time frame.

Wake up Mr Fenech and come back down to earth and the realistic land of the living.