Malta’s VAT system has been criticized for allegedly “rewarding” non-compliant taxpayers, raising concerns about fairness and effectiveness. The system allows taxpayers to request a remission of interest and penalties for late payment of VAT, potentially benefiting those who haven’t fulfilled their obligations. This has sparked debate about whether the current framework inadvertently favors those who don’t comply with VAT regulations.
The VAT Act in Malta outlines penalties for non-compliance, including fines and interest charges, but taxpayers can appeal these penalties if they have a “reasonable excuse”. Critics argue that this flexibility might be exploited, undermining the system’s integrity. On the other hand, the tax authority aims to balance enforcement with support for taxpayers who genuinely struggle to comply.
