John Dalli announces Budget 2003 measures on VAT administration

Finance Minister John Dalli yesterday announced the implementation of new measures towards a more efficient administration of VAT. The new measures are the crystallisation of Budget 2003’s plan to reform the VAT system in favour of small entrepreneurs and self-employed.
By mid-March, self-employed who employ an average of five persons and whose turnover does not exceed Lm250,000, will be eligible for VAT refunds. The refunds will take place 30 days following receipt of the VAT declarations.
Registered persons who satisfy the criteria of such scheme whose closing date for their VAT declaration is 15 March 2003 will receive their refunds by 15 April. The VAT department will also be assessing the companies’ declared number of employees upon registration of VAT and verified with the Employment and Training Corporation. The VAT department will also be considering the value of sales for the period between 1 December 2001 and 30 November 2002.
Taxpayers who believe are eligible to this scheme should notify the VAT department and send in the required information.
Companies which provide goods and services exempt with credit will have VAT refunded to them within four months instead of five. By 2004, refund will take place in three months instead of four.
For those companies whose period for VAT-declaration started on the 1 January 2003 and ended on 31 March, and which would have to be received by the VAT department not later than 15 May, would receive their VAT refund in four months instead of five.
Penalising measures which have been in place since 1 January 2003 will also be put into action. Taxpayers with first-time declarations that have been given in late to the VAT department due to abnormal circumstances will have their due penalty waived and instead given a warning. Relapsing taxpayers will be penalised according to the law.
Minister Dalli also said the VAT department would be preparing details for another scheme to reduce penalties which had been imposed through the VAT Act of 1995 and the Customs and Excise Act of 1997. The scheme would benefit those persons who sent in their prospects late or failed to register on time according to these regulations.