Chamber concerned about VAT changes

The amendments to the VAT law granting powers to the VAT Commissioner to enforce the collection of VAT have come under fire from the Malta Chamber of Commerce and Enterprise.

The chamber expressed its concern that it was not consulted over the amendments.

It objected strongly to the changes because, it said, they could have serious consequences for the business sector.

The proposals could lead to abuse particularly in cases of VAT assessments, the chamber argued.

It said it was technically correct to assume that businesses are supposed to collect VAT from clients to be passed on to government by the next tax period. In practice, however, this does not materialise because businesses are not paid for their services by clients there and then.

This exacerbates the cash-flow problem for businesses as the VAT element of the transaction remains due to the Commissioner of VAT irrespective of whether or not the monies due has been paid.

The chamber appealed to the government to reconsider its plans and come up with more appropriate measures for enforcing the law.