A 15 per cent flat tax on property rental income will come with a partial amnesty on past dues, The Business Observer has learnt.

Details of the scheme will be released shortly by the government as it moves ahead on a Budget pledge to tap into what has been a perennial fiscal black hole with very few including rental income in their tax returns.

Although the flat tax rate was seen as a positive move to encourage people to declare rental income, questions have been raised as to whether those who evaded tax in the past would actually come forward, fearing investigation by the tax authorities.

When asked about the possibility of an amnesty, Finance Minister Edward Scicluna said such a scheme would have to be accompanied by “a reasonable cap” on past tax due.

Shying away from using the word amnesty, he said that owners would be given the chance to “register” their rental property much in the same way as the asset registration scheme launched last week.

“Abuse has been rampant in this sector and the government was getting nothing from it. Just as we had done when the 15 per cent bank withholding tax was introduced, this scheme for rental income will generate revenue while ensuring that owners pay a reasonable flat tax,” Prof. Scicluna said.

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