They say there are two inescapables in life – death and taxation. The grim reaper proves the truth about it every minute of the day, maintaining its supreme position as the great leveller.

Tax is something else. Not only can it be avoided – escaped from through marginally legal means. It can also be evaded – not paid through illegal action. Malta ranks among the best examples of thelatter truism.

People have been evading tax since the day the various forms were introduced, whether they be customs or excise duties, income tax or value added tax.

This latest addition to the government’s means of collecting revenue to finance the bulk of its expenditure has been very much in the news since its creation. Initially it became a political ball, with the Labour Party opposing it as an unfair tax.

It was briefly replaced with a mish-mash of indirect taxation during the interlude of the Labour government of 1996 to 98. When that ended, the Nationalist government restored its favourite indirect tax.

After putting political expediency before my knowledge of taxation and publicly supporting VAT’s removal, I finally came clean and admitted that the Labour replacement, which I had helped create, was not as good. A main reason for my preference for VAT was that, properly deployed, it established an audit trail which should help reduce tax evasion.

Such evasion had made me come up with the concept of fiscal morality and also conceive a commission for its promotion. There was never much enthusiasm for it.

Once the Nationalists came in they killed it dead. Even its memory was left to rot. The government tried other means to attack evasion. They knew it existed, and the Auditor General reminded and reminds it regularly of that fact in his yearly report on public revenue and expenditure.

The Nationalists have an odd relationship with income tax. When it was proposed by the first post-war Labour government, they opposed it tooth and nail. They forecast all sort of ills if the tax was implemented, despite it being considered as a more just tax than indirect measures, not least because it brings about redistribution of income and wealth.

Notwithstanding such socially just distribution Archbishop Michael Gonzi too was said to have grave doubts about the tax. Labour veterans active at that time, now long gone, used to tell me that the Archbishop had threatened the Labour ministers with ecclesiastical punishment should they dare introduce a top rate of more that 50 per cent.

As it was, that rate became 65 per cent without the bishops actually turning the alleged threat into action. That rate was never paid by more than a handful of individuals. It was blatantly avoided and actually encouraged evasion by shareholders in local companies, since the deduction at company level was at a much lower rate.

Companies led by savvy directors simply let profits accumulate, with shareholders enjoying the fruit of their labours by loading personal expenses on their company’s expense account.

Well before the 1987 election, the Nationalists had promised to abolish income tax if elected. By the time victory was under their belt they had dropped that proposal, but slashed the top personal rate of 65 per cent to equate it to the tax withheld on shareholders’ account at the company level.

It was a sensible amendment, but it did not do away with evasion. It remained rampant and successive Nationalist finance ministers sought to attack it at one level by giving the opportunity to evaders who hoarded money abroad to repatriate their illegal investments against a favourable penalty.

It still did not do the trick. Nor has the setting up of a Tax Compliance Unit and carrying out audits on individuals or companies selected at random give evasion a mortal blow. It remains alive and kicking. Not just in the case of income tax, but also in regard to VAT and the other two indirect taxes, customs and excise duties.

Which, to me, puts the current uproar about internal VAT abuse and VAT fraud in a perspective which has yet to be drawn by the Labour Party and media critics. It is, certainly, unacceptable that a report on VAT fraud and a systems audited have taken inordinately long to be made public. In fairness to the VAT head, the replies to the systems audit were direct and diluted the concern expressed to a considerable extent.

To my mind, however, the discussion of the Value Added Tax should be rapidly broadened to determine why the tax has not been establishing audit trails to the extent that could be done, especially given the electronic means deployed by the various taxing departments. Calling for headsto roll does not address thisparticular gap and its unjustconsequences.

Action should be taken to the extent that there were abuses, or negligence, or both. But it would be more meaningful still to take steps to make sure that the taxation system works fairly by taxing all those who should be taxed and wringing evasion out of it.

Unifying the tax departments, a proposed budget measure which still to see the light of day, may or may not make it easier to establish and forcefully follow audit trails.

But that objective must be robustly addressed if a culture is finally to arise whereby paying one’s tax dues is seen as an unpleasant but necessary duty which should not be evaded.

One which, if met by all, might lead to an eventual lightening of the tax burden.