Target dates for tax refunds

The Inland Revenue Department owes Lm16,898,206 in income tax refunds backdated to year of assessment 1998, the Prime Minister said yesterday. The taxpayers concerned will next year be told the amounts due, the method of payment and the settlement date.

Dr Gonzi told Labour MP Chris Agius in reply to a parliamentary question that the Income Tax Act did not specify when this money should be refunded. It only specified that refunds of tax paid post-1998 should be settled within six months of the deadline for the submission of the tax return or within 12 months when the return was submitted late, failing which the department was obliged to pay interest of one per cent.

As explained in the Budget speech, however, the government had decided that the payment of the 1998 refunds would not continue to be postponed indefinitely. Therefore, next year, all taxpayers eligible for refunds would be informed of the amount due and how payment would be made. Payments would be settled within a stipulated period which was being provisionally calculated at between one year and a maximum of 36 months for substantial amounts. The department would also bind itself to pay interest at one per cent if these targets were not respected.