I refer to the editorial published on May 27. The Times is most certainly correct in its assertion that the VAT Department ought to be continuously under scrutiny considering it is a key department responsible for a significant part of government revenue. As a result, when alleged wrongdoings at the department came to the fore, the minister, besides informing the Commissioner of Police in order to investigate, appointed a board of inquiry briefed to investigate and review processes at the same department, in an effort to improve its reliability and reduce its risk.

The report indeed identified a number of administrative shortcomings in the general administrative framework of the department that needed to be addressed. The government’s approach in the context of such conclusions was to implement all the necessary measures and decisions required to reduce risk. This includes the strengthening of security, supervisory structures, internal controls, amendments to beef up existing legislation and other ancillary measures to improve the department’s risk analysis system. Moreover, the department’s human resources, particularly in terms of officers responsible for inspection, were substantially improved.

Specific measures also include the establishment of an Analysis and Control Unit responsible for internal auditing of the work carried out by departmental officials, while analysing claims for refunds and performing risk assessments. Claims for refunds which fail to pass from the criteria tests are withheld for further investigation.

An exercise was also carried out to identify registered persons who had changed their address and had failed to inform the department. Through such exercise the department has increased compliance and reduced the risk related to the recovery of balances due by these persons.

VAT legislation was also amended to consider as a criminal offence, the failure to provide to the Commissioner, when required, any used or empty copies of fiscal receipts in one’s possession. A further amendment was also introduced in VAT legislation by which a person who is found in possession of software that erases, destroys, damages or conceals any stored information or records, documents or accounts, will be liable to criminal prosecution together with the supplier of such software.

The full list of actions implemented by the department, also following the auditors’ recommendations, has been provided to The Times with this letter.

With regard to The Times’ disagreement with the minister’s criticism of the opposition’s insensible accusations, it is worth clarifying the context of the minister’s remark. The minister’s comments were directed towards the irresponsible demands being made by the opposition, which had unfairly stigmatised VAT officials that had not been found guilty of any wrongdoing, and which seemed to suggest a massive clean-out and heads to roll at management level.

The minister claimed that sensitivity was required and that one could not afford to destabilise a department which was responsible for the collection of around one-third of the country’s revenue simply to satisfy the demands for heads to roll. The police investigation had clearly identified the cause behind the fraud as collusion between a number of officials that have since been found guilty and removed from the department. Extending the responsibility to faultless officials would only serve to destabilise the functioning of the department. This is not in the country’s interest, besides being unfair on a human level.

Additionally, the opposition criticised the delay in publishing the auditors’ report. It would have been very irresponsible for the government to publish such a report before these shortcomings had actually been addressed by the department. The safeguard of revenue in such a circumstance takes precedence over the publishing of such a report, premature publication of which, without the necessary time to make the necessary changes and take remedial action, would have caused more public harm than good.

The opposition has only sought to secure political goals through popular catch-phrasing and suggesting witch-hunts at management level, when both police and internal investigations have not provided any reason to support this. Evidently, disciplinary action has also been taken against the persons found guilty by the courts. Yet, here again, the opposition has leapt into their defence by suggesting that the government had only targeted small fry.

To the contrary, the government has acted swiftly and took the decisions required to ensure increased security and accountability at the department and to establish the necessary structures to counter the possible risks associated with fraud, which become more complex through technological innovation and complex strategies.