Don’t undermine law-abiding operators

A fair tax system ought to ensure that taxpayers are given the same treatment when paying their dues.

This is the principle that should guide policy decisions that impact how and when taxes are paid to ensure a level playing field prevails.

This is more of a necessity in the business world, where survival in a competitive environment must not come on the back of tax evasion or non-payment.

It is a fact that some businesses face difficulties in meeting their tax payments over the years. This can happen for a myriad of reasons.

Challenges can be the result of negligence or worse malicious intent. But there are also genuine cases of companies that are struggling and require assistance.

In these cases, assistance to overcome challenges must not be exclusive or determined on an ad hoc basis.

No business should be afforded special treatment on the basis of connections. Any special treatment must be grounded in policy that is accessible to all who require it.

Within this context, this leader joins the Chamber of Commerce in expressing concern over reports that a company’s tax bill has been slashed from €40 million to €10 million following several agreements reached with the authorities. The Finance Ministry has denied these reports.

This leader has to stress the importance of settlement agreements that are guided by policy.

Irrespective of the case flagged in the media or its merits, the absence of policy will only create doubts and foment accusations of preferential treatment.

Policy guidelines that are fair, clear and accessible to all will ensure transparency and fairness prevail.

Offsetting any tax due against pending payments owed to the company by the government could be a plausible solution. But this must not be an exercise in appeasement such as offsetting tax against future dues that may result from ongoing tender procedures.

Tax evasion is a crime and this can never be underestimated. Malta has learned the hard way that adopting a light attitude towards financial crime is conducive to corruption.

While the administrative settlement of tax dues is an accepted principle in various jurisdictions of repute, this cannot be a blanket policy that overlooks serial abusers, or those whose tax evasion runs into large sums.

The Chamber of Commerce is right in calling for a fully integrated IT system for public authorities that will flag any economic operators that are falling back on payments to public entities.

It is unfair on law-abiding operators for abusers to be able to bid for government contracts unless they have a repayment programme in place. This distorts the level playing field that operators desire and need.

It is incredulous and wrong to see certain business operators that have significant tax problems and other illegalities, winning public contracts worth hundreds of thousands of euros, if not millions. This is unfair and disheartening for law-abiding operators.

The Chamber has called for an overhaul of the public tendering system to ensure transparency, expediency and value for money, while ensuring a level playing field prevails.

This must be a priority, especially in light of the recent damning findings by the National Audit Office in the award of a management services contract at St Vincent de Paul.