PM proposes ‘cut off’ sums as settlement for income tax defaulters
Income tax defaulters are to be given an opportunity to meet with tax department officials and negotiate an agreeable ‘cut off’ sum to settle their pending arrears with government.
The move was proposed by Prime Minister Lawrence Gonzi who last week discussed the scheme with Finance minister Tonio Fenech as a further incentive to thousands who have recently received letters from the tax department to pay arrears in income tax that amount to almost €600.
According to sources, the scheme is to complement the recently announced amnesty for people who had arrears in their income tax payments dating back to 1998 would have a 90 per cent reduction on the interest and fines they owed on their dues.
Those who had arrears prior to 1997, when systems at the Income Tax Department were not registered on computer, would pay 75 per cent of the balance due.
Applicants have until January 15 to apply. The scheme is voluntary but applicants would be required to drop any objections or claims they might have.
While government is also attempting to recover a shortfall of €80 million in projected revenue for this year, the prospected announcement on a negotiation incentive to ‘cut off’ arrears owed to government in income tax was triggered by the numerous complaints cabinet ministers and MPs have received from constituents who have received their bills.
Meanwhile, the Budget that is expected to be announced in parliament in three weeks time is to include measures to fight tax evasion, with Minister Tonio Fenech insisting that the Inland Revenue Department must be strengthened to confront avoiders and defaulters.
One of the reasons behind the amnesty was for the government to recoup some of the money it was due especially when it was forecasting a drop of €60 million from taxes, including €20 million from income tax. The government had no intention of extending the scheme to value added tax, Fenech said.