Finance Minister Edward Scicluna said this evening that VAT and income tax procedures would be simplified as part of the merger of the two departments next year.

From next year, payment would no longer be automatically set off against the oldest balances. This would benefit taxpayers.

The Government would introduce new dispositions on VAT in dispute so that payments would not be set off against outstanding balances which were still in dispute.

Furthermore when people were convicted of a second offence, the courts could choose to impose a jail term or a fine. To date, a jail term was mandatory.

The government would also launch a campaign against tax evasion. In the construction industry, those who would not be able to explain the estimates of their work would have to pay all VAT due.