War of words over VAT stock refunds

by Franco Aloisio

While the Commissioner of VAT is saying that the situation regarding the VAT refunds on trading stocks is normal, several business executives are promising to wage a "war" against the department if these refunds are not paid in time. The GRTU is even threatening to issue directives if all refunds are not paid by September.

Speaking to The Malta Business Weekly several business executives complained that although the VAT Department has been promising that it will pay the refunds on the VAT stocks in time, this has not yet occurred. A particular businessman told this newspaper that he is owed Lm2,000 in refunds. He added that, according to the law, these should have been paid two months ago. "This is our right. We are presently passing through a serious cash-flow problem and the refunds would improve the situation," he said.

The GRTU has also made these claims, saying that it will order action if nothing is done to pay these refunds. In its publication Newstring, it said that last January it had agreed with the Ministry of Finance that payments had to be made immediately for those preferring to be given the refunds through the fast-track scheme. Those who opted for a full stock-take had to be paid by

September. However many are still awaiting these refunds. "VAT stock refunds are not a social cost like income tax. They form an essential part of the daily liquidity of private enterprises," GRTU claimed

The whole issue is about those refunds which the government owes to business executives on the stocks which had already been subjected to CET when VAT was re-

introduced last January.

Joe Portelli, the Commissioner of VAT, told The Malta Business Weekly that as regards to the fast track scheme of issuing the refunds, these have already been paid. A total of 3,067 applications have been processed and Lm3.4m in stock refunds were paid.

As regards the stock-take scheme, a total of 2,877 applications were received by the closing date of 30 June 1999, of which 1,167 have already been paid a total of Lm3m. Fifty-four applications have been rejected. The number of outstanding applications is 1,656 of which 400 have been processed and are awaiting payment, said Mr Portelli.

"The remaining applications are undergoing audit investigation and payment will be affected once the result of the investigation is known," he added.

Mr Portelli said that so far the VAT Department has paid only Lm1,400 in interests to those tax payers whose refund was sent late.