Only half of businesses meet tax obligations
Tax authority says corporate tax compliance remains 'consistently low'
Only half of businesses in Malta met their tax obligations last year, tax authorities have said.
In its annual report for 2024, the tax and customs administration acknowledged that corporate tax compliance remained consistently low, with an overall average of 49.5% last year.
Despite various initiatives to improve compliance, the reported data indicated “minimal progress”, the authority said, highlighting ongoing challenges in ensuring timely and accurate tax filings from businesses.
This “stagnant” compliance rate suggests the need for more engagement with businesses, tailored support programs to address barriers faced by corporate taxpayers and stricter enforcement measures, it said.
Last year, the authority sent over 250,000 letters, e-mails and text messages to taxpayers reminding them of deadlines for tax submissions. The initiative was extended to corporate taxpayers this year.
The administration said it collected €431 million in tax arrears in 2024, an increase of €56 million over the preceding year.
Tax commissioner Joseph Caruana said the amount of tax revenue collected increased by over 17.5%, with only a small part originating from increased economy activity.
This was achieved through various enforcement actions, including demand notices, judicial letters, payment notices and instalment plans, he said.
Caruana said the authority had faced a “daunting task” to establish how much of the tax arrears are actually collectible, as opposed to being based on estimates.
He said the collectible amount came to 13% of the total arrears.
Last week, Times of Malta reported how the government proposed legislation giving those with unpaid tax arrears a choice: either face possible legal prosecution for tax evasion or pay an additional fine and avoid criminal charges.
The government said the new fine would range from a minimum of €10,000 to a maximum of €1 million.
In addition to the new fine, the culprit will also have to pay the existing administrative fines imposed by tax authorities for unfiled taxes, as well as any interest on those penalties
Customs action
The authority said it set new drug haul records in 2024.
Those hauls included 4.3 tonnes of cannabis resin, 2.3 tonnes of cocaine, and 285.5kgs of hallucinogenic, or "magic", mushrooms.
The customs enforcement directorate also seized 15 million counterfeit cigarettes.
Its surveillance also resulted in the identification of 12 stolen vehicles.