Malta’s tax authorities are owed almost €1.2 billion by individuals and companies. Yet only €412.9 million is considered recoverable.
These figures, brought to light through parliamentary questions by Nationalist MP Graham Bencini to Finance Minister Clyde Caruana, demand more than an explanation of how much money is outstanding. They demand accountability.
How much of this debt could have been recovered if action had been taken earlier? How much became irrecoverable through delay, administrative failure or the collapse of businesses? How much has the State actually recovered, year after year? And who is responsible for ensuring that debts do not simply accumulate until they become little more than entries in an accounting ledger?
We should not assume that every outstanding euro is recoverable, or that every debtor has evaded tax. Some liabilities are historic; some debtors may genuinely be unable to pay. But these qualifications cannot become a blanket excuse for failing to explain the figures.
The Government is increasingly turning to artificial intelligence to identify suspicious discrepancies between declared income, business turnover and apparent wealth. That is welcome. But identifying a potential tax problem is not the same as resolving it.
The State must account not only for the taxes it collects, but also for the taxes it fails to collect.
That means publishing meaningful figures on the age of outstanding debts, annual recovery rates, enforcement action and the reasons amounts are written off or deemed irrecoverable. It means setting measurable targets and reporting against them. And it means making clear who is responsible for performance, rather than allowing responsibility to disappear into the machinery of public administration.
There is a fundamental question of fairness here. Employees have income tax deducted from their wages. Businesses that comply with the law meet their obligations alongside salaries, rent and other operating costs. They cannot simply decide that payment is optional.
Why should those who comply be expected to trust a system that cannot demonstrate what happens when others do not?
This is not an argument for indiscriminate enforcement. Taxpayers are entitled to due process, and the State must distinguish genuine inability to pay from deliberate non-compliance. But fairness requires both proportionality and consistency. The law must protect the honest taxpayer as firmly as it pursues the dishonest one.
Nor is the €1.2 billion a pot of money waiting to be spent. The fact that only €412.9 million is considered recoverable makes it all the more important to understand how the gap arose and whether it could have been reduced.
Artificial intelligence may help the Government find discrepancies. It cannot answer for years of accumulated arrears, explain administrative failures or take responsibility for missed opportunities to recover public money.
That responsibility belongs to the institutions and officials charged with administering the tax system, and ultimately to the Government accountable to Parliament and the public.
Graham Bencini has put the figures on the parliamentary record. The Government now owes the public something more useful than another announcement about technology: a credible account of what went wrong, what can still be recovered and what will change to prevent the same problem recurring.
Accountability is not merely explaining how much the State is owed. It is explaining why it remains unpaid, who is responsible, and what will be done about it.
Sources
MaltaToday – Taxman owed €1.2 billion from individuals and companies
Times of Malta – Tax officials to contact hundreds of suspected evaders over unexplained wealth