Finance Minister Edward Scicluna yesterday disputed European Commission figures showing that Malta was the third-worst performer in the EU in terms of VAT collection.

However, he said that a joint enforcement task force would soon be set up to crack down on tax evasion.

According to the figures, 35.3 per cent of expected VAT revenue in Malta remained uncollected in 2014. That meant a loss of €351 million.

Malta’s VAT gap, or difference between expected VAT revenue and the amount actually collected, was the third widest across the EU. Only Lithuania (37 per cent) and Romania (38 per cent) did worse.

The Finance Minister, however, disagreed with the Commission’s findings. Prof Scicluna said Brussels had changed the formula used to calculate the figures.

The disagreement was mainly on the iGaming sector, where the Commission felt Malta should be collecting more VAT revenue.

They are saying we can collect so much and we are saying this is not the case

“We know of that. Our concern is those sectors on which VAT is imposed under our laws and we are collecting it. It is increasing in tandem with our economic growth. The disagreement is on the formula. They are saying we can collect so much and we are saying this is not the case,” he said.

The Commission statistics show that, despite Malta’s poor overall showing, it was also among the EU countries to make the greatest strides in improving VAT compliance.

The EU as a whole lost €159.5 billion in revenue due to VAT evasion in 2014. The average VAT gap was 14 per cent. This was nevertheless an improvement on 2013, when it was 0.69 per cent higher.

Italy, with €36.9 billion in uncollected VAT revenue, posted the biggest loss with the EU.

At 1.2 per cent, Sweden had the narrowest gap, followed by Luxembourg (3.8 per cent) and Finland (6.92 per cent).

Brussels said the findings supported the Commission’s calls to overhaul the EU’s VAT system to tackle fraud and make it more efficient.