09 February 2005

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Gozo businessmen irate over VAT evasion allegations
By Matthew Vella

The Gozo Business Chamber has finally reacted to reports drawn from parliamentary replies that have shown Malta’s sister island to have been accountable for just one per cent of VAT payments in the last five years.
Gozo, which accounts for seven per cent of the entire business register, was shown to have contributed just one per cent to the entire VAT account since 1998. The figures were presented by Prime Minister and Finance Minister Lawrence Gonzi in reply to questions by Nationalist MP Jason Azzopardi.
The Chamber is questioning the figures quoted in Parliament since it is “certain” that they are “very misleading and definitely do not reflect what is happening in reality”.
According to the statistics, the total of 3,588 registered businesses and individuals offering services on the island of Gozo are accountable for just one per cent of VAT, on average paying eight times less than the average Maltese VAT-registered units.
The statistics show that since 1999, Gozo businesses were accountable for an average of 1.16 per cent of VAT. In 2003, from a total of Lm123 million collected in VAT, Gozo contributed just Lm1.1 million (0.92%).
“Just to bring one example on the issue, one has to understand the fact that nearly all Gozitan importers pay their VAT in Malta. Therefore only the VAT that is being reported from their side is that paid on the margin of profit that the importer makes when selling to the wholesaler or to the retailer.
“The same applies to all the banks that have branches in Gozo. This again applies to all companies operating from Gozo like the Water Services Corporation, Enemalta and Maltacom as well as private companies operating from Gozo but registered in Malta. All their VAT payments are accounted for by their respective head office in Malta.”
The chamber said it believed it only fair that Lawrence Gonzi gives an explanation of how these figures were reached and by whom. The chamber said it was prepared to meet whoever is compiling the information in order to explain the true facts and “put a stop to unfounded allegations, which tend to tarnish the Gozitan business community”.
“The Chamber sincerely hopes that neither the honourable member who tabled the questions nor the Prime Minister who answered them have any hidden agenda about Gozo and the Gozitans.”

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