Report by the Auditor General on the Ministry for Finance and Employment: Analysis on Revenue Collection

Today, the Auditor General, Mr Charles Deguara, presented to the Hon. Speaker of the House of Representatives, Dr Anglu Farrugia, a report by the National Audit Office (NAO) entitled, ‘Ministry for Finance and Employment: An Analysis on Revenue Collection.’

The scope of this analysis, carried out by the Financial and Compliance Section, was to collate and analyse the revenue streams collected by the Office of the Commissioner for Revenue and Customs during 2020. This is a follow-up on the analysis reported upon in 2016, focusing on the changes that occurred during the subsequent four years. The NAO also commented on the level of enforcement procedures in place in relation to revenue collection, as well as the relative staff complement.

As a result of the severe global economic impact of COVID-19 and the ensuing restrictions to mitigate the spread of the pandemic, the anticipated economic goals did not materialise, which situation obviously impacted the forecasted tax revenue collection. This led to a substantial drop in all income streams during 2020, against the upward trends in the preceding four years, from 2016 to 2019. In 2020, a total of €3,770 million was collected from Income Tax, Social Security Contributions, Capital Transfer Duty, Value Added Tax and Customs.

This analysis also revealed that the most common enforcement tools that were applied to collect outstanding dues essentially consisted of legal action and the remission of interest agreements.

Considering the special circumstances that affected the year under review, this Office intends to conduct a similar follow-up assignment within a couple of years.