Christian Peregin
'Do not stop refunds to businesses'
Prominent business representatives have expressed concern about the decision to postpone refunds because of investigation into fraud allegations at the VAT office.
Vince Farrugia, director general of the Chamber for Small and Medium Enterprises - GRTU, said the measure could be "very, very bad" for businesses because it could aggravate the cash flow problems being experienced by many companies.
Banks were being more stringent with credit, he said, so many businesses were postponing payments to other businesses to get a bit of a breather. Therefore, the government had to do all it could to speed up refunds rather than slow things further.
"This goes contrary to what everyone else is doing in Europe where they are trying to speed up refunds in order to ensure there would be no cash flow problems," he said.
Malta Employers' Association director general Joe Farrugia too said he hoped investigations would be conducted as quickly as possible to avoid any cash flow problems.
While the association understood the need to investigate such serious allegations, if the investigations took too long, businesses would end up incurring a cost, particularly at a time of economic slowdown, Mr Farrugia said.
The Sunday Times reported yesterday that over €10 million in VAT refunds were being held back because of the investigations.
Sources said the investigation had revealed that a web of criminals acting as middlemen were receiving the lion's share of a three-way scam involving VAT department staff and businessmen.
The newspaper report said intermediaries would approach businessmen and inform them they could dodge paying VAT and pocket thousands of euros in the process.
The businessmen would file their VAT return normally but, at a later stage, the staff involved would alter the return, change the figures and issue refunds and receipts. After assuring the businessmen they could not be caught because they were in cahoots with department staff, it would be established how much each party would receive.
It appeared that, in practice, only refunds that exceeded €50,000 were queried and verified by more senior officials within the department and, therefore, the reimbursements were issued in figures below that amount in the knowledge that the possibility of ever being checked was negligible.
Popular Stories
Update 3: Woman found dead in car,...
Updated: Woman dies in car crash
Carm Mifsud Bonnici resigns after...
Part of Dwejra 'Azure window' collapses
The end of the bar that ‘never closed’
Bundy does not know whether to...
Updated - Jason Micallef demands...
This WAS the night - Kurt makes it...
Petrol price up 6c
In Discussion
Updated - Jason Micallef demands...
Gozo tunnel could take 5-7 years to...
CABS remote controlled aircraft shot...
Carm Mifsud Bonnici resigns after...
Joseph Calleja condemns portrayal of...
Updated: Labour would give...
CABS drone shot down
Second group of migrants arrives
Adrian Vassallo in scathing...
8 Comments
Post comment
Please sign in or create your Account to post comments.
Mike Magri
Apr 13th 2009, 18:13
I fully agree that if this allegation turns out positive, the impact is going to be huge on both the VAT Dept. and those involved. So it makes a lot of sense that precautions be taken.. However, on the other hand i also think that it is not justifyable to put every one in the same basket. So i strongly feel that there should be a maximum amount that could be paid, for those only claiming refunds of not more than, say, 3500 euros.. The reason being that common sense tell me that when something like this happens, its always for a 'Big Fish'..!!
John Inguanez
Apr 13th 2009, 15:52
Malta is full of innocent people! How can we be certain the refunds being posponed are not part of the fraud? And what a chorus of people joined together when government acts! I think the next thing governmnet should do is to investigate all self-employed declaring the minimum of income and see how many of them have Mercedes, speedboats and the sort. A worker who honestly work and earn his salary will never never manages to buy a speedboat. A self-employed declaring the same income will have. Something is fishy. And one question to the GRTU and the Chamber of Commerce, where has the money saved from the conversion commission following the Euro adoption gone? Where they reverted to the consumer? Certainly not! So let the government and police act and tell your members to be more honest working citizens!
Joanne Micallef
Apr 13th 2009, 13:08
I can understand the Goverment for taking such a stand, but one has to also keep in mind that we are going through a recession so at least the Goverment should reassure those concerned that this matter will be resolved as soon as possible.
A Zammit
Apr 13th 2009, 13:07
My money (taxes) are ending up in the pockets of businessmen so that they can buy the Mercedes, villas and have the lavish holidays on the yachts. On the other hand, I can never make enough money to buy my own flat. If I manage, I would be free out of debt after 30years.
This is the Maltese justice!
Andres Landers
Apr 13th 2009, 10:09
I have a small business and fully understand Mr. Farrugia. At the same time I do understand the government to postpone the refunds. Maybe it would help us all more if Mr. Farrugia presses his members to collaborate more so the middlemen are found faster? Maybe Mr. Farrugia makes sure that the auditors involved in backing up the scam are brought to justice?
Jos Vella
Apr 13th 2009, 09:58
TIPIKAMENT LI MAL-HAZIN JEHEL IT-TAJJEB.
victor caruana
Apr 13th 2009, 09:57
To vince farrugia
If businesses, members of the GRTU, are eventually identified as having participated in the fraud, what would be the GRTU's reaction towards such businesses?
Charles Stafrace
Apr 13th 2009, 09:27
I cannot understand how why many are insisting that the VAT department should continue to effect refunds while investigations are still underway. What if any of the refunds are part of the fraud? Will the business involved then refund the refund? The department is right - no refunds until all has been cleared.