Updated - Scicluna announces measures to encourage VAT defaulters to pay up

Finance Minister Edward Scicluna has announced five measures which will make it easier for those who are in default of VAT payments to regularise their position. In the past, individuals or companies that were in default found themselves caught in a system which quickly became unsustainable, as interest mounted and made it harder and harder for them to get back on track. “We have to learn from the past and see where we can improve the system,” Prof Scicluna said, stressing that the government never looked at interest and fines as being revenue, but rather as a deterrent. “The interest rate and fines were very high. You might even describe them as ‘usury’ for those who fell behind as it made it very hard for them to ever catch up,” he said. The measures are aimed at encouraging those in the black economy to register for VAT by making the system more “humane” for those who lapse, while still remaining firm with those who repeatedly defaulted, who he described in no uncertain terms as “parasites”. The main measure is that the interest rate on tax due will go down from 9% per year to between 6 and 6.5%. In order to reduce the accumulation of interest and fines, any payment made by...