The introduction of Value Added Tax from 1 January 1999 / L-Introduzzjoni tal-Value Added Tax (VAT) mill-1 ta' Jannar 1999

On the 1^st January 1999, the new Value Added Tax Act 1998 becomes operative after it was approved by Parliament. VAT 1999 is based more or less on the 1995 version but incorporates changes which make it more user friendly to business operators. The changes were effected following consultation talks with constituted bodies representing various sectors across the whole business spectrum and on the experience gained from the operation of VAT 1995.

In order to explain in more detail the various changes of the new VAT law and how to comply with its provisions, the VAT Department has already embarked upon an information campaign in the media, educational visits to business establishments and direct correspondence and meetings with business operators in various localities in Malta and Gozo. The Department of VAT has also set up an information service on Freephone 160 and on telephone number 499330-4.

The rate of tax will be of 15% both on the sale of products and on the provision of services. The rate of tax on tourist accommodation will be 5%. Under the CET system, the effective rate of tax on the major part of imported taxable goods was 21% whilst that on services was about 10%. One would expect that in the case of products there should be an adjustment in prices reflecting the decrease in the rate of tax while prices for services should remain more or less at the present level.

VAT 1999 introduces the concept of thresholds. In this regard, business operators whose volume of sales does not exceed Lm15,000 in the case of sale of products and Lm10,000 and Lm6,000in the case of provision of services, are being given the option of joining the refund system or staying out of it. Those operators whose value of sales as declared by them falls below the established limits were individually informed to give notice to the Department about their choice.

The new VAT law also provides for a more efficient operation of the refunds system enabling the operators to claim input VAT on purchases and the other expenses connected with the business in a shorter time. Besides, a method of accounting for VAT on a cash basis will be available for certain sectors. Such a system should assist all business operators to manage their cash flow more effectively.

Arrangements have also been made with the Malta Development Corporation and the Customs Department to enable ‘bona fide’ manufacturers of raw gold to obtain a certificate for the deferment of VAT before such product is released from Customs. The same arrangements have been made for entitled export-oriented manufacturers. In case of any difficulties in this regard, one may contact MDC on telephone number 667100.

As announced in the Budget speech for 1999 as from 1^st January 1999, three schemes will be launched for the refund of VAT on weddings and funerals expenses as well as for the acquisition of dwellings by first time buyers similar to that introduced in 1995. It is therefore imperative for prospective applicants to ask for and retain fiscal receipts and other relative documents to enable them to apply for refunds under the respective schemes. At a later stage, the particular Departments to which applications under the respective schemes should be addressed will be indicated.

As was the case in 1995, a refund scheme will be set up to provide for the refund of excise tax on stocks existing on 31^st December 1998. The VAT Department would like to remind business operators who hold stocks in warehouses and shops to estimate the value of their stocks as at the end of December 1998. This exercise is necessary to enable them to apply at a later date for the refund of excise tax in accordance with criteria which will be published in a legal notice. Those details will be issued shortly.

Enforcement procedures will still be continued in a more reasonable way. For this purpose, the law makes provision for the examination of business records and books of accounts before an assessment of tax is served on taxpayers. The businessman would therefore be given the opportunity to explain his position before the assessment is raised. Changes for the better have also been made in cases where the business operator feels he has grounds on which to lodge an appeal against an assessment raised by the Department. According to the provisions of the new VAT law, instead of the 25% deposit on the whole amount of assessed tax as was required by the CET Act, only an amount of 5% of the tax in dispute or Lm50, whichever is the lower, is now required to be deposited on the lodgement of an appeal together with a sum of Lm25 to cover administration expenses. If the taxpayer’s appeal is successful, he will receive a full refund.

As in 1995, no VAT will be chargeable on food products, pharmaceuticals, as well as books and newspapers. A considerable number of services, such as water and electricity, cable telephony, maritime services, air and sea transport, public transport, medical and educational services as well as banking services will be exempt from the payment of VAT. Agriculture and fisheries will likewise be exempt from VAT.

Business operators, including exempt businesses, that is businesses which do not charge and collect VAT, will still be required to issue fiscal receipts. In order to ensure that consumers will not be cheated into paying VAT by exempt businesses, fiscal receipts issued by cash registers as well as fiscal receipts issued manually by this category of exempt businesses will carry the mark ‘Exp’ or ‘Exempt’ respectively.

It is also important for the consumer to appreciate the necessity of exercising his right to ask for a fiscal receipt. In the first place, the consumer may need to make a complaint on the quality of a particular product or service procured and he has to provide his fiscal receipt as documentary proof that a specific product or service was provided by a particular business establishment. Secondly, this would serve as an effective step toward fiscal morality as this would help in promoting further a tax paying culture that would curtail the possibility of increased taxation which would burden one and all.

The VAT Department therefore invites the co-operation of business operators and the general public to ensure the smooth operation of the new VAT system in the interest of all concerned.

L-Introduzzjoni tal-Value Added Tax (VAT) mill-1 ta' Jannar 1999

Fl-ewwel ta’ Jannar 1999 ser tidhol fis-sehh il-ligi dwar it-Taxxa fuq il-Valur Mizjud wara li giet approvata mill-Parlament. Il-VAT tal-1999 ser tahdem l-istess bhal dik tal-1995, izda b’tibdil li jaghmilha iktar user friendly ghall-operaturi tan-negozju. Dan it-tibdil sar wara konsultazzjonijiet mall-Korpi li jirrapreúentaw is-setturi diversi tan-negozju u fuq l-esperjenza tal-VAT tal-1995.

Biex ikunu mfissra aójar t-tibdiliet li saru u kif wieóed æandu jimxi mad-disposizzjonijiet tal-liíi, Id-Dipartiment diíà qed jaæti taærif permezz tal-media, újajjar edukattivi fil-postijiet tan-negozju u korrispondenza diretta u laqæat ma’ l-operaturi tan-negozju f’diversi nóawi f’Malta u f’Æawdex. Id-Dipartiment óa ósieb ukoll biex iwaqqaf servizz ta’ taærif fuq il-Freephone 160 jew fuq in-numri tat-telephone 499330-4.

Ir-rata ta’ taxxa tal-VAT ser tkun ta’ 15% kemm fuq il-prodotti, kif ukoll fuq servizzi. L-akkomodazzjoni turistika ser tkun bil-5%. Taót is-sistema tas-CET ir-rata ta’ taxxa effettiva imposta fuq il-biðða l-kbira ta’ prodotti importati taxxabbli kienet ta’ 21%, filwaqt li fil-kaú tas-servizzi kienet ta’ madwar 10%. Æalhekk wieóed jistenna li fil-kaú tal-prodotti jkun hemm ðaqliq fil-prezzijiet li jirrifletti dan it-tnaqqis fir-rata ta’ taxxa, filwaqt li l-prezzijiet tas-servizzi æandhom jibqæu bejn wieóed u ieóor l-istess.

Fis-sistema l-ídida tal-VAT daóal il-kunðett tat-thresholds. L-operaturi tan-negozju li l-valur tal-bejæ taæhom ma jaqbiúx Lm15,000 fil-kaú ta’ prodotti u l-Lm10,000 u Lm6,000 fil-kaú ta’ servizzi, qed jinæataw l-æaúla jekk iridux jidólu fis-sistema tar-refunds jew le. Dawk l-operaturi tan-negozju li l-valur tal-bejæ taæhom, kif dikjarat minnhom stess, jaqa’ taót il-limiti stabbiliti, íew informati individwalment biex javúaw id-Dipartiment bl-æaúla taæhom.

Il-liíi l-ídida tal-VAT tipprovdi wkoll æat-tóaddim tas-sistema tar-refunds fuq xiri u fuq spejjeú tan-negozju b’aktar óeffa u f’iqsar úmien. Ser ikun hemm ukoll æal ðerti setturi skema ta’ rendikont ta’ taxxa, ibbaúata fuq ólas li æandha sservi ta’ æajnuna lil dawn l-operaturi tan-negozju fit-tóaddim tal-cash flow taæhom.

Saru arraníamenti wkoll mal-Korporazzjoni Maltija ta’ l-Iúvilupp u d-Dipartiment tad-Dwana biex il-manifatturi ‘bona fide’ li jimpurtaw direttament deheb mhux maódum ikunu jistæu jinæataw ðertifikat ta’ diferiment mill-ólas tal-VAT qabel il-prodott jiíi rilaxxat mid-Dwana. L-istess arraníamenti saru æall-manifatturi kollha li jesportaw u li huma ntitolati. F’kaú ta’ diffikulta f’dan ir-rigward, wieóed jista’ jðempel l-MDC fuq in-numru tat-telephone667100.

Skond kif tóabbar fid-diskors tal-Budget æal 1999, mill-Ewwel ta’ Jannar 1999 ser jitniedu skemi æal ólas lura ta’ VAT fuq tiíijiet, funerali u l-ewwel dar æall-abitazzjoni bóal dik li kienet introdotta fl-1995 fuq l-akkwist ta’ l-ewwel dar. Æalhekk, dawk li bi ósiebhom japplikaw taót dawn l-iskemi æandhom jitolbu u júommu l-irðevuti fiskali u dokumenti oóra rilevanti. Aktar ‘l quddiem tinæata indikazzjoni f’liema dipartimenti wieóed æandu japplika skond l-iskema relattiva.

Bóal ma sar fl-1995, ser titwaqqaf skema æall-ólas lura tat-Taxxa tas-Sisa fuq óaúniet kummerðjali eúistenti fil-31 ta’ Diðembru 1998. Id-Dipartiment ifakkar lil dawk in-negozjanti li æandhom stokk fl-imóaúen u l-ówienet biex jaraw x’ikun il-valur tal-óaúniet taæhom fl-aóóar ta’ Diðembru 1998. Dan hu meótieí biex ‘il quddiem ikunu jistæu japplikaw æall-ólas lura tat-taxxa tas-sisa skond kif jiíi stabbilit permezz ta’ avviú legali. Iktar dettalji ser jinóaríu dalwaqt.

Il-proðess ta’ nfurzar tal-liíi ser jitkompla iúda b’mod aktar raíonevoli. Æal dan il-æan, il-liíi l-ídida tal-VAT tipprovdi biex qabel ma toóroí stima ta’ taxxa ikunu f’kull kaú eúaminati l-kotba tan-negozju. B’dan, it-taxpayer ikun qed jinæata ðans jispjega l-qaæda tieæu. Fil-kaú ta’ operatur tan-negozju li jóoss li æandu jappella fuq stima maóruía mid-Dipartiment, ukoll sar tibdil æall-aójar. Skond il-liíi l-ídida tal-VAT, flok depoúitu ta’ 25% fuq l-ammont kollu ta’ taxxa kif kien isir s’issa, ikun meótieí li jitóallas biss ammont ta’ 5% tat-taxxa li jkun hemm kwistjoni dwarha jew Lm50 skond liema minnhom tkun l-oæla, flimkien ma’ Lm25 æall-ispejjeú ta’ amministrazzjoni. Jekk jirbaó l-appell, it-taxpayer konðernat jieóu kollox lura.

Bóal ma sar fl-1995, mhu ser titóallas ebda VAT fuq prodotti ta’ l-ikel, mediðina, ilma u elettriku, cable telephone, kif ukoll kotba u gazzetti. Æadd ímielu ta’ servizzi bóal servizzi marittimi, oqsma tat-trasport bl-ajru u bil-baóar, it-trasport pubbliku, servizzi mediði, servizzi edukattivi u servizzi bankarji ser ikunu eúenti mill-ólas tal-VAT. L-istess iæodd æall-biedja u s-sajd.

L-obbligu fuq il-óruí ta’ rðevuti fiskali mill-operaturi tan-negozju ser jibqa’ anke fuq dik il-kategorija ta’ negozjanti li ser ikunu klassifikati bóala persuni eúenti, jiíifieri dawk li ma jiíbrux VAT. Biex ikun úgurat li l-konsumatur ma jintalabx ióallas l-VAT minn persuni eúenti, ser ikun hemm il-marka ‘Exp’jew ‘Exempt’ fuq l-irðevuti fiskali maóruía bil-cash register u dawk maóruía bl-idejn rispettivament.

Huwa mportanti li l-konsumatur jaæraf il-ótieía li jitlob l-irðevuta. L-ewwelnett jista’ jaæti l-kaú li l-konsumatur jkollu jaæmel ilment dwar prodott u servizz li jkun xtara u jkollu búonn l-irðevuta biex jipprova li dak il-prodott jew servizz óadu minæand it-tali negozju. It-tieni, dan iservi bóala mezz effettiv favur il-moralita fiskali billi jkun qed iæin biex toktor il-kultura ta’ ólas ta’ taxxi li tnaqqas l-possibilita’ ta’ úieda fit-taxxi li jkollu jbatiha kulóadd.

Æalhekk id-Dipartiment tal-VAT ióeííeí il-koperazzjoni ta’ l-operaturi tan-negozju kif ukoll tal-pubbliku biex is-sistema l-ídida tal-VAT taódem tajjeb fl-interess u æal íid ta’ kulóadd.



31.12.98