We refer to the leader Tax Collection Needs To Be Re-engineered (May 16). As some of the figures were erroneously quoted and what we have outlined at the Public Accounts Committee appears to have been misinterpreted, we are of the view that a reply as follows would be fitting.

The leader states that the Inland Revenue Department is owed €258 million even if “taxpayers had assessed themselves to owe €361 million”. The €361 million quoted is not what taxpayers declared in their self-assessment, but represents the outstanding year-by-year tax balance from 1999 to 2011, which includes €208 million made up of tax estimations. Such estimations are issued by the department for failure by taxpayers to file their self-assessment return.

Regarding VAT arrears, in his intervention in the Public Accounts Committee the VAT director general explained that although, according to the National Audit Report for 2011, the arrears book balance read €567 million, the collectible amount based on a formula agreed with the National Audit Office was estimated at €31.6 million (in the article €316 million were quoted as collectible). The ‘uncollectible’ difference represents mainly estimations raised by the VAT Department where a VAT return is not submitted and assessments or penalties that are not yet final and conclusive.

We strongly rebut the claim that in describing these discrepancies, we used a language in our intervention in the Public Accounts Committee that in any way reveals a pitiable state of the tax collection processes in place. What we stated was that, while acknowledging certain constraints and difficulties in the current system of collection of arrears, we were optimistically looking forward to the merger of the tax revenue departments. We are aspiring that, by pooling resources and experience, we would ensure a better and much more efficient tax collecting department.