More than a month after an inquiry found serious shortcomings in the VAT Department, the VAT Commissioner has refused to be interviewed.
Joseph Sammut turned down a request to be interviewed by The Times about the workings of the department with particular focus on the conclusions of the inquiry report.
In a curt reply his office said: “It is regretted that Mr Sammut is not in a position to accede to your request.”
Mr Sammut’s contract expired in March but the government temporarily extended it pending a public call for the post of VAT Commissioner.
The inquiry board was set up by the Finance Ministry in the wake of a number of VAT fraud cases that were discovered in 2009. The report was tabled in Parliament last month, about 15 months after it was concluded.
A large scale police investigation into fraudulent practices by a number of staff members, which cost the department millions of euros, had led to a number of people being arraigned.
The report spoke of serious shortcomings, such as lack of accountability and risk awareness among management. Management was also hounded by “an evident silo mentality” that hindered synergy between the various sections of the department.
The report found that all files brought up for investigation are distributed among inspectors and this resulted in “a number of files lying on desks”.
“Taxpayers who are expecting a refund are contacting inspectors putting them under pressure by asking for favours to have their file dealt with early. On the other hand, in cases where fraud is suspected, the favour asked may be to place the file at the bottom of the pile. This system may lead to collusion,” the report said.
It also noted that inspectors did not have lockers where to keep files under lock and key when they were absent from their desk.
The government had said that the recommendations were taken on board and changes implemented throughout the course of 2010.
In the wake of the report, the government rejected calls for the top management of the department to resign and also defended giving Mr Sammut a performance bonus of €5,000 for at least two years. A spokesman for the Finance Ministry had justified this by saying Mr Sammut helped implement a number of measures “to improve security and reduce the risk of fraud at the VAT Department”.
But for business analyst John Cassar White the internal changes that could have been done to the administrative processes in the wake of the report might not be enough to send the correct message that things will be done differently.
“In issues concerning tax infringements, the government has to give clear visible signals that it intends to tackle the problem and, in this case, without pinning any blame on the department’s current management, I believe a new management team should have been appointed,” Mr Cassar White said.
He noted that taxpayers had the Mediterranean characteristic of “almost justifying tax evasion”, which made it all the more important for concrete action to be seen to be taken.
“A clean sweep would have inspired taxpayers,” Mr Cassar White said.
ksansone@timesofmalta.com