Practically in every budget speech one hears the Finance Minister announce that the government intends to curb tax evasion in the coming year. Most unions similarly insist that before any new taxation is considered, the government should wage a more determined war against tax evasion. So why does tax evasion remain so rampant when every official organisation seems so determined to curb it?

A recent study called The Shadow Economy in Europe 2013 commissioned by Visa and written by international consultancy firm AT Kearney, places Malta among the countries with the greatest relative size of the black economy when measured against GDP.

According to this study, Malta’s black economy amounted to 25.3 per cent of GDP 2012. This is equivalent to €1.7 billion of GDP. This ratio is even higher than that of countries like Greece whose black economy is estimated to have reached 24 per cent of GDP.

Perhaps a more revealing comparison is Luxembourg, another relatively small EU country, with a black economy of merely 8.2 per cent of GDP. The average size of the black economy across the EU is just 18.9 per cent of GDP.

So the numbers speak clearly: the government is simply not winning the war against tax evasion which is the main driving force behind the large size of our black economy.

There are many politicians and some economists who argue that the black economy is not such a bad thing after all. There is, of course, some merit in this argument. Especially in a difficult economic scenario, governments should be careful not to exacerbate the situation by adding a dose of austerity by waging a holy war against tax evasion that could lead to job losses and cessation of marginal economic activities.

But if the country is to promote economic growth while guaranteeing its citizens decent public services without imposing exorbitant taxation, it needs to be more determined to collect what is due to it by the state. The staggering amount of tax due but uncollected is nothing short of alarming.

Old outstanding debts are often uncollectable as delays in collection often mean it may be too late to remedy this situation once a business’s fortunes have turned sour.

An equally debilitating weakness on the part of government departments is the inadequacy of the processes for prevention, or at least detection, of tax evasion by both small and large economic operators.

It is a well known secret that the tax compliance unit within the Finance Ministry is inadequately staffed and arguably badly managed making it difficult for the government to collect its taxes effectively.

There may be various reasons that make this problem an endemic one. The most dangerous cause could be the lack of political will to do what it takes to make the prevention of tax evasion effective.

No politician likes to irritate the electorate that votes it into power, but there are times when electoral expediency is simply not a priority.

Collecting tax that is due when it is due is one of these times.

Another possible reason for our large black economy may be lack of human and technological resources that can help detect tax leakages and point fingers at who is causing such leakages.

Preventing tax evasion can be made more effective if the government invests more in trained human resources that need to be paid salaries at least as good as those paid by private industry.

Curbing tax evasion must go beyond good intentions.