Lm332m expected to remain uncollected

Only Lm80.6 million out of a total of Lm412.4 million reported by ministries and departments as arrears of revenue for 2005 are expected to be collected, according to the Report of the Auditor General for 2005 which was laid on the table of the House of Representative yesterday.

The Inland Revenue Department had the highest arrears figure - Lm269.7 million in local currency and Lm13.5 million in foreign currency. Companies owed Lm155.2 million, followed by the self-employed (Lm36.2m) and private employees (Lm30.2m). The VAT Department had to collect Lm86.2 million at the end of 2005.

The report says that an audit of the Public Registry in respect of searches revealed that no regular back-ups of the database for searches were submitted to the registry by the company which runs the registry. During 2005, the department paid Lm1,213 million while revenue collected from the public amounted to Lm1.019 million. "No arrears of revenue were reported even though a considerable amount of revenue was still uncollected in respect of searches."

Auditor-General Joseph Galea says that a number of concerns were reported as regards local councils, some of which had also registered various weaknesses with respect to the accounting of the local enforcement system.

The report notes that in an audit carried out at the Group H Joint Committee (Gzira, Pembroke, St Julians, San Gwann, Sliema, Swieqi and Ta' Xbiex), it was observed that the tribunal's pending payments in respect of the pooling period stood at Lm504,335, an increase of 40 per cent over the previous year. A provision for pooling bad debts was estimated at Lm136,515, an increase of 60 per cent over 2004.

Outstanding payments to the tribunal totalled Lm596,032 last February. Lm111,315 related to 65 motor vehicles and Lm155,880 to 69 owners. Nineteen of the vehicles and 22 of the owners had each accumulated pending payments of over Lm2,000. The top offending owner was Lm26,000 in arrears.

The report notes that although the Traffic Regulation Ordinance provides that the road licences of motor vehicles may not be renewed until pending fines or penalties are settled, 1,736 motor vehicles with a valid road licence last March had their licence renewed even though payments to this tribunal were still pending.

Turning to other issues, the Auditor General said the Social Security Department's computerised system did not incorporate a nominal bank account that could be reconciled to the bank statement. Furthermore the department did not retain a list of unpresented cheques for each reconciliation period.