Heads must roll at the VAT Department, according to a number of commentators who spoke to The Times following an audit report that identified a “grave risk” of insider fraud.

“Action has to be taken and be seen to be taken very soon,” said Vince Farrugia, director-general of the Chamber of Small and Medium Enterprises – GRTU.

The country could not afford a “demotivated” taxpaying public, so any doubts in the system had to be sorted out, he said.

It was “completely unacceptable” for the government to wait 15 months to publish this report following such an embarrassing incident of VAT fraud in 2009, he said.

The damning report, which was concluded in February last year, was only tabled by Finance Minister Tonio Fenech on Monday.

In the private sector, a businessman would want the report as soon as possible, to stop the haemorrhage immediately, Mr Farrugia said, as he called for a re-evaluation of the system to eliminate all abuse potential.

Anyone suspected of being responsible for the failings should, therefore, be identified and removed, he said.

“The public sector is vast and they can be moved horizontally. I’m not calling for a witch-hunt. But the taxpayer can’t have the slightest doubt in the system.”

Economist John Cassar White shared these sentiments and said the top people at the VAT department should all be changed.

“In any private organisation, when things go so drastically wrong, heads roll and you need to set an example,” he said, adding that the department should ­completely review its management systems.

“If you want to have a system of accountability, it means that when things go wrong, people have to make way for others to make a fresh start.”

Those administering the taxpayer’s money were in a position of trust and should ensure they managed the system properly. However, he said this was unlikely to happen in Malta, where resignations are rare.

“It’s a shame because this is why people lose faith in politics and in paying their taxes. They think their money is wasted anyway... People are making big sacrifices to pay their VAT, income tax and other taxes. The last thing they want is a cover-up or a whitewash. When things go wrong we can’t just say: ‘This is a mistake, from now on we’ll do things better.’”

Former Labour finance minister Lino Spiteri was less blunt, saying the report should be analysed by a parliamentary committee – one that preferably includes backbenchers, not ministers.

“I don’t want to talk about rolling heads at this stage,” he said, since the administration of the VAT department should be given an opportunity to state their case.

The matter could be decided by the Public Accounts Committee but only if it could act in a serious manner without politicising the issue at the outset.

“The report is in the political sphere and should be seen by politicians acting as real representatives of the people,” he said, adding that in the recent past the PAC had been “ridiculed” by the presence of ministers and their attitude.

“Therefore, it might be advisable to set up a specific committee to examine this audit and report back to the house.”

Joseph Sammut, the director-general of the VAT department, on Monday denied that there was lack of accountability and risk awareness in the department, as found in the audit. He said responsibilities had been considerably increased since Malta joined the EU.

Meanwhile, the Labour Party called the report a “blow-by-blow indictment of the inefficiencies in which this government has allowed one of the crucial revenue-collection departments to sink in.”

“After reading the audit report, it is clear why the Finance Minister chose to keep it away from public scrutiny for more than a year.”

On the other hand, the government has not yet reacted to the report’s findings.