Millions of euros being lost in uncollected VAT

Malta’s VAT collection mechanism is being dubbed one of the most inefficient among the EU’s 28 member states, depriving the exchequer of tens of millions of euros in potential revenue every year.

A technical study published by the European Commission shows that, in 2012 alone, Malta had the potential to raise an additional €241 million from VAT which, however, were lost.

According to the study, which calculates the VAT gap of EU member states, Malta’s efficiency in recouping VAT is one of the worst, with the island losing about 31 per cent of potential VAT revenue every year.

The study said that while the island in 2012 had a potential of raking in some €777 million from VAT, it only got €536 million.

Back in 2009, it was estimated that Malta’s VAT gap stood at 14 per cent; three years later it stood at an average of 16 per cent, almost double the EU average.