Astonishment as tax notices reach homes

A man from Ibraġ could not believe his eyes when he opened an envelope addressed to his father from the Inland Revenue Department.

The notice alerted the recipient that his father had failed to declare his income tax since 1998 - a bewildering request seeing that the man in question had passed away in 1990.

His son said he had sent the death certificates and settled all the pending dues in 1992.

Similarly, a man from Marsascala wondered why last week he was being alerted "for the first time" about a €70 tax arrears bill dating back to 1998.

"My tax bill in subsequent years always showed I had no arrears," he said.

The Inland Revenue department's latest amnesty initiative to recoup some of the €600 million tax arrears dating back decades has ruffled the feathers of many oblivious taxpayers, even though those that owe money to the department can benefit from a 90 per cent reduction in fines and interest accrued over the years.

Finance Minister Tonio Fenech had said that to qualify for the amnesty, defaulters would have to pay the reduced amount by a specific date and give up any objections or claims against the department.

According to a Finance Ministry spokesman the initiative has been met with a good response.

He said the objectives of the scheme are to provide a general clean-up of the department's 60-year records.

This included a number of tax forms that were issued before the introduction of technology in the departments.

An estimated 85,000 are believed to have some form of pending tax bill. More than 20,000 had submitted the form by mid-December. The forms can be submitted until January 22, and then payment must be made by February 22.

"Although we sympathise with family members who are receiving notifications related to dead relatives, unfortunately death does not mean exoneration of taxes due. Like other inheritance, it is inherited by heirs," the spokesman said.

He insisted the notices currently being sent to defaulters were not the first, but will be the last ones, since legal procedures will be initiated against those who fail to comply.

Aware of the criticism levelled by those in line with the law, the ministry said no amnesty was being given from tax dues, but rather a reduction in fines and interest.

"This scheme is intended to ensure that those who have defaulted on payments even included those with genuine cases related to the tough economic situation in 2009.

"Ultimately, the taxpayer stands to benefit too, since the government will save the legal costs to recoup these taxes via legal measures."

The government had also introduced a law reform where the interest was reduced to 0.75 per cent and the capping concept was introduced, so as to ensure a fairer tax enforcement system. In January 2009 late filing and omissions fines were also decreased.

hgrech@timesofmalta.com