Malta loses up to between €120 to €150 million in VAT evasion yearly, the government estimated – but the actual figure could be much higher, up to €300 million.
Though the Finance Ministry’s internal estimates estimated up to €150 million lost due to VAT evasion, senior officials told the Times of Malta that they estimate it could be double that, up to €300 million, in lost taxes prior to the COVID-19 pandemic.
Before that time, the Inland Revenue Department collected some €800 million in VAT yearly.
According to the European Commission’s latest VAT gap report, the island lost around €164 million worth of revenue in 2019.
When Finance Minister Clyde Caruana launched a pre-budget document, he said the government plans to come down hard on VAT evasion.
In the budget speech on 11th October, Caruana will specify how exactly the government plans to do so, saying they will “recoup close to every penny that is being evaded”.
Before COVID-19, VAT revenue made up around one fifth of all the money collected by the state.
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