The manner in which the Tax Compliance Unit randomly probed individuals would come under scrutiny to ensure equitable tax enforcement, the Finance Minister announced yesterday.
Edward Scicluna said it was important for people to trust the TCU, a tax watchdog, adding the Government wanted to put greater emphasis on enforcement.
He was speaking at a pre-Budget consultation meeting at the Phoenicia Hotel.
Prof. Scicluna admitted he was taken aback during the feast of St Helen in Birkirkara when he saw VAT inspectors asking for receipts in various bars.
“There is a time and place for everything. I could not tell the inspectors anything but I would like to know whether this was routine practice or was it decided this year because when decisions are unexplainable people are right to complain they are being picked upon.”
When decisions are unexplainable, people are right to complain they are being picked upon
Reacting to a suggestion from the floor to increase the number of VAT inspectors on the beat, Prof. Scicluna said he wanted to ensure tax enforcement was done in an equitable manner.
He reiterated that an amnesty for VAT and income tax defaulters would shortly be announced.
The amnesty would cut penalties and accrued interest but defaulters would still have to pay all tax due.
Prof. Scicluna said the Budget would see funds earmarked for a reform in the justice system including the creation of new courts.
“Court delays cost people time and money,” he said, adding that justice reform was a priority for the Government.
He said the Budget would have measures to introduce free childcare centres and bolstering the Klabb 3-16.
Prof. Scicluna insisted teachers would not be asked to continue working after school, referring to a controversy that erupted last week, adding other solutions could be found.
He noted that former finance minister Tonio Fenech had signed off a number of invoices to the same company on March 8, totalling €400,000, for public relations services linked to the Budget.
“I only discovered this by chance now because my people told me there were no funds left to spend on the Budget meetings,” he said to a sympathetic crowd. Prof. Scicluna was reminded on two occasions of the injustices hounding the pensions system, including service pensioners who received a reduced government pension.
He acknowledged the “myriad” problems in the pension system, saying they would start to be addressed.
“They are decades-old problems that we have inherited and solutions are not easy but we will gradually start to tackle them.”
He said the Budget would include tax incentives for young people to invest into a private pension as part of the ongoing pension reform, saying he had received a report on the matter drawn up by experts from the Central Bank, the Malta Financial Services Authority and the Finance Ministry.
ksansone@timesofmalta.com