Editorial

From time to time, the question of tax evasion takes centre stage. A recent EU survey reveals that the majority of Maltese believe it is very easy to evade income tax and conduct undeclared work, with a staggering 65 per cent of the respondents saying it is almost impossible to get caught.

The European Commission pointed out that, although tax evasion occurs throughout the EU, it is more widespread in southern Europe. Obviously, salaried people are particularly infuriated by this situation as they are obliged to pay all their taxes.

Yet, all sectors of society, salaried or not, are sorely tempted to accept services without receipts as this saves them the extra costs due to VAT. Needless to say, the self-employed are notorious for evading the full declaration of their income. But, then again, how many salaried workers have undeclared part-time work?

Taxation has a very negative image. The often-repeated aphorism "death and taxes are inevitable" reflects this reality. Mark Twain's jibe was even more caustic when he said: "What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin". With such an ingrained mentality, it is not surprising that taxes are perceived as an evil to be avoided. As any accountant will tell you, tax avoidance is a well-refined art in itself. However, it bears reminding that the tax structures in place are founded on the principle of solidarity and distributive justice.

All of us, at one stage or another, to a greater or lesser extent depend on the government for educational opportunities, medical services, old age security and the like. We all clamour for more assistance, more allowances, more free drugs, more stipends. The government is not a magician and cannot produce these benefits out of a hat.

Too often, the mismanagement of public monies is used as an excuse to justify tax evasion when the answer should be taking a stand against political incompetence and corruption. That is why public opinion is particularly irked when it feels that there is crass mismanagement or when the real big earners are provided with innumerable legalistic loopholes to escape their dues to the society from which they benefit so handsomely.

From the Christian perspective, taxation is not just a question of justice. It is based also on love, the kind of love that recognises the worth of every person and our mutual responsibility to each other.

However, taxation has to be reasonable and fair.

Like every government responsibility, it is a question of judicious balance. It is easy for people to shrug off their responsibilities if they feel the state owes them a living. It is easier still for governments to become irresponsible about taxes and expenditures, so long as by extending welfare services they win votes for themselves.

All sectors of society, particularly the political class, the Church, educators and the media, have a role to play in instilling a sense of civic responsibility in one and all.

When we seek services and benefits that are well within our means, we are increasing unduly the burden the state must shoulder. This also is a form of theft of public funds.

Thankfully, over the years, tax compliance in Malta has improved and tax regimes have become fairer and more responsive to the realities of an increasingly more sophisticated economy.

However, there is no room for complacency and tax evasion has to be curbed, chasing the sharks with more enthusiasm than the minnows.