The government is owed over €1 billion in income tax but almost €900 million of it is considered "uncollectable", according to figures tabled in parliament  on Tuesday.

Finance Minister Clyde Caruana said that by the end of last year, the government was owed €1,079,346,907 in gross income tax arrears.

Of that amount, €885,605,819 is considered uncollectable "because it consists mainly of tax estimates that were generated after people and businesses failed to submit their income tax returns".

"It is estimated that 60 per cent of this money is owed by companies," Caruana said.

€4.8 billion in VAT

Similarly, the government is owed over €4.8 billion in Value Added Tax (VAT), almost all of which is also uncollectable for the same reason.

Caruana was replying to two parliamentary questions by PN MP Albert Buttigieg.

This is not exactly new news, however.

In 2022 the National Audit Office found the taxman was owed €925 million in income tax, of which only €166 million could be collected, and Caruana himself even alluded that uncollected taxes could reach €5 billion in a parliamentary speech earlier that year.

Taxes are classified as ‘uncollectable’ due to a variety of reasons, ranging from claims being statute-barred to ongoing disputes.

Despite there being no real prospect of ever recovering that money, the government continues to mark it on its accounts as being owed, rather than writing the money off.

Significant strides

Having said that, the government seems to have made significant strides in collecting what it is owed since then.

Last year the taxman collected €500 million more in taxes than it did the previous year as the tax department cracked down on tax-dodging companies. This year it expects to collect a further €200 million over last year.

Caruana announced the amounts ahead of the budget last month, saying the customs and tax departments "quietly but effectively" clamped down on tax-dodging businesses and companies that were especially lethargic in paying their dues.