Hairdressers complain of unfair tax system

Hairdressers are tearing their hair out in frustration as the Tax Compliance Unit "forces" them to cough up tax money in advance.

During a meeting organised by the Chamber of Small and Medium Enterprises - GRTU at the Halland Hotel on Wednesday, hairdressers claimed their business was being jeopardised.

Several hairdressers insisted they were being forced to sign an agreement with the Tax Compliance Unit (TCU) that would effectively compel them to pay a stipulated monthly sum of money in VAT and income tax in advance for a duration of three years.

Hairdressers present for the meeting lamented that they were threatened with investigations, penalties and interest rates if they failed to sign the agreement. Such penalties would drive anybody in business "insane".

Irrespective of costs and of business performance, hairdressers had no choice but to make tough payments every month, they said.

But GRTU officials came to the rescue and assured hairdressers that they would weed out such "abuse" by officials.

GRTU director general Vince Farrugia said his organisation opposed the TCU because it turned Malta's main tax laws upside down. Malta's tax laws were not anti-business if they were operated correctly, and therefore there was no need for such tough tactics.

No establishment owner should be obliged to pay taxes as though they were paying rent, irrespective of sales.

The TCU's system has turned a flexible system into a rigid one, Mr Farrugia protested, prompting businesses to shed workers to remain in operation.

The GRTU promised to take the hairdressers' plight to the finance ministry and said it would call for the additional costs sustained by the electricity surcharge to be deducted from the amounts of money requested by the TCU.

The association also promised to set up an organised system of licences for hairdressers to ensure standards are maintained. The GRTU vowed to stamp out abuses by those operating illegally and would try to set up new assistance schemes to improve the quality of the hairdressing service.

An action committee was appointed during yesterday's meeting.

The TCU's director general was not in a position to give his reaction last night.