Efficient tax collection restricts
The cashflow crunch which is currently impeding so many businesses
around the island could be at least partly down to the much more efficient
collection of taxes that is now in evidence.
Speaking in an interview in todays edition of this newspaper,
Frank Xerri de Caro, Bank of Vallettas chief officer for credit
management and retail banking, admitted the banking sector was very
much aware of the serious cashflow problems on the island.
"This problem is specific to the business sector," he said.
"In personal banking, ironically, customers evidently have a lot
of money to save and invest, but many businesses are completely stuck."
Mr Xerri de Caro said there was no doubt that the culture of bartering
has restricted cashflow, and added that the bank tried to dissuade clients
from this practice as much as possible.
"Another possible reason for the jam may well be the governments
efficiency in collecting revenue," he continued. "Collecting
taxes when theyre due is good for the government, but it has probably
"Previously, I suspect that businesses had cashflow which pertained
to government, but which was being used, even if wrongly, for these
He also highlighted the impact of the general recession overseas, but
stressed that Maltas small size was undoubtedly helping it to
adapt better to changing economic conditions than some others.
"The importance now being attached to business plans, is also helping,"
he added. "People are growing more conscious of the returns they
expect from their own business and have specific goals they want to
achieve, which gives them a greater awareness of whats going on
and the need to nip problems in the bud."
See full interview on pages 10,11