Anthony R. Curmi, St Julians
Unreasonable delay in income tax refund
The level of inefficiency at the Inland Revenue Department is hard to believe. In May 2009, I dutifully submitted my income tax return for Basis Year 2008. Due to my having a fluctuating level of annual income (because of gyrations in the €/GBP exchange rate) I realised that I had overpaid Provisional Tax substantially. Having explained the situation to the IRD, I was hoping for a reasonably quick refund of tax overpaid especially as, in previous years, my very straightforward tax return was processed within a couple of months.
Various reminders to the IRD chasing the refund produced a series of "cut and paste" letters that stated merely "when refunds are issued is an administrative decision". As I never got an answer to my repeated query as to whether my tax return had been processed (thus making possible the refund) I was constrained to refer the matter to the Ministry of Finance in December 2009. At least a step forward was that the ministry confirmed last February that my tax return had been duly processed but this was being held back by the IRD because a refund (which, I was told, would be issued "shortly") was involved!
My spirits were uplifted when I read in the media a statement by the Prime Minister early in March that "the government will this month pay the last instalments of tax refunds due to 6,711 tax-payers who are owed a total of €11,617,530". Alas, I am still without my tax refund 11 months after having submitted my tax return proving the amount I overpaid in 2008.
What irks me even more is that I have now received the IRD's claim for PT due by April 30 for Basis Year 2010. The amount requested is half that owed to me for tax overpaid for the year ended 15 months ago and I have been told that this has to be paid, as one amount cannot be offset against the other. Interest is payable both ways but why should one have to wait so long for a tax refund?
One can see through the obvious reason (deflating the real fiscal deficit) why governments purposely delay refunds beyond December 31, but it is much for taxpayers to be made to pay so dearly for the inefficiency of the IRD. As they themselves admit, the timing of tax refunds is determined by an administrative decision. So much for clarion calls of efficiency and accountability in government offices!
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Emanuel Farrugia
Apr 21st 2010, 14:09
I do not know if in my case it was luck, but I saw the other side of the coin. On the first of April 2010, I received a cheque from IRD for refund due for 2008 together with interest for three months and it was no April Fool.
I believe M. Vella seems to be unaware that interest on refunds from IRD is only applicable from the Year that the Income Tax Act was amended to include payment of interest for late refunds from IRD or fines from the consumer for late tax return. If I am not mistaken, the law was amended after 1998.
M Vella
Apr 20th 2010, 11:45
Mr. Curmi, I don't know if my experience with the IR Dept will lessen your frustrations.
My employer overdeducted my PAYE contributions to the tune of nearly E1000 between 1995-1998. I received a declaration of refund from the IR Dept in the last months of 2008. YES TEN YEARS LATER !!!!!!
I got my refund in three installments, the first in Dec 2008 and the last in March 2010.
Interests on the refund sum for the ten year period - NONE. I only got 8% interest on the sum of the last installment for a period of three MONTHS as they were late by that period on the last refund.
Alan Kay
Apr 20th 2010, 10:48
Dear Anthony, May I respectfully suggest you submit a PT reduction form, downloadable from the IRD website, which I found was dealt with very efficiently.