There is still no word from the VAT review commission set up after the discovery of internal fraud at the department, though the Finance Ministry said it was "still going on" with its work.

The commission was set up in August but faced its first major hurdle when the chairman, a former civil servant with the Income Tax department, resigned three weeks later, claiming he felt "uncomfortable" investigating people who were professional colleagues.

A second person was appointed in September but both names have been kept under wraps by the ministry.

"Work is still going on and consequently I am not in a position to answer these questions at the time being," a ministry spokesman told The Sunday Times when asked whether the commission had concluded its work and if not when it was expected to do so.

It is unclear how the commission's work will be integrated with the Budget proposal to have one super tax department incorporating the Inland Revenue department, the VAT department and Customs department. The proposal was intended to curb tax evasion through better coordination by the tax collection authorities.

The review commission is tasked with carrying out an internal review of the VAT department's processes, identifying weaknesses in the system and suggesting controls to curb abuse.

The VAT scam by department employees and businessmen was initially believed to have cost public coffers €10 million in lost revenue, a figure denied by the minister last week who said it was more in the range of €2 million.

ksansone@timesofmalta.com