Finance Minister Edward Scicluna this evening reiterated the government’s plans to merge the VAT, Inland Revenue and the Customs departments into one authority, saying it would ensure there was better efficiency in tax collection while facilitating the payment of arrears.

He was speaking during the debate in Parliament on the Commissioner for Revenue (Amendment) Bill. Its purpose is to set up the Remission of Interest Board for the purpose of making recommendations to the Commissioner with regard to any application for the remission of any amount due to a revenue department .

Prof Scicluna said that Budget 2015 preparations were on track and the pre-budget document would be issued within a month.

He said that in order to address tax evasion, two legal notices would  provide for the removal of interest and excessive penalties on tax due so that taxpayers in arrears would become compliant.

The minister said that he was aware that a heavy burden had been placed on companies which owed a lot of interest on unpaid taxes, but they were being offered a practical solution. He made it clear that there would be no negotiation on arrears on the actual tax due, which had to be paid, but he was speaking about the accumulation of penalties and interest fees, which would be removed.

He also wanted these arrangements to be made public so that those who had always paid on time would know that there was nothing being done behind their backs. There would be a level playing field, and he did not wish to hear rumours that tax evaders were “getting away” with anything because they had spoken to someone.

Prof Scicluna said human resources in the government departments would be increased so that taxpayers would be better served.  The IT sections of the VAT and income tax department were being harmonized and staff were being given the relevant training.

Companies which were negotiating with the government because they were owed money, but also owed the government money, would find the process easier with this merger. However he stressed businesses should not use the government as if it were a bank to give them their liquidity.