Just under 3,500 taxpayers have responded to the VAT Department remittance scheme, a considerable increase over the 450 who responded to the previous scheme.

Of the 3,485, around 800 have been vetted for eligibility and the VAT Department has issued so-called ‘option letters’ to taxpayers, i.e. letters outlining the options open to applicants.

Of the 800 taxpayers who have already been vetted by the VAT Department and found eligible, over 400 taxpayers have already settled their dues. The amount collected to date currently stands at approximately €200,000.

Further payments are expected over the coming weeks as further applicants are vetted and payment deadlines expire.

“The process is ongoing and laborious due to the thorough vetting process involved. In fact, 2,700 applications are still being vetted,” the Finance Ministry told Times of Malta.

The ministry said the response was surprising, as it had assumed that most of the defaulters would already have responded to the previous three schemes.

“Such take-up was considered to be thanks to the professional and effective marketing of the scheme to the public. This in itself means that the fourth and final phase of the scheme, and its public awareness campaign, were successful,” the ministry said. The VAT Remittance Scheme allowed taxpayers to benefit from a partial pardon on penalties and interests incurred (up to 80%) which were making it even harder for defaulters to pay the actual tax arrears.

“The government felt that certain aspects of the interests and penalties regime are somewhat draconian and played a part in the hardship which some taxpayers have had to face for an extended period of time. This remittance scheme represented a respite for those taxpayers who wish to regularise their position, but have been unable to do so until now due to outstanding interests and penalties,” the ministry said.

“For the VAT Department, this scheme represented an opportunity to recover aged debts and finalise all the deregistration requests which are still outstanding because of pending returns.

“Such schemes are a recognition that past tax-collection efforts might not have been wound up as they should have through these years, and suggests that the department’s practice of sending out Demand Notices and Statements might be insufficient. Such measures led to courts sittings and further suffering and difficulties to taxpayers.”

Throughout the public awareness media campaign in October and November, roughly 10,500 letters were sent out by the VAT Department directly to taxpayers. A number of taxpayers still failed to indicate their participation, and in these cases the department tried to make contact with these taxpayers either over the phone or by re-sending informative leaflets and necessary documentation to alternate addresses.