The Minister for Finance welcomes the latest VAT Gap Report published by the European Commission where Malta recorded the highest decrease in the VAT Gap in the EU.
The VAT GAP measures the effectiveness of VAT enforcement and compliance measures in each Member State, by providing an estimate of revenue loss due to fraud and tax evasion.
Malta’s VAT gap for 2017 stood at 2 per cent which is the fourth-lowest VAT Gap in the EU. The VAT Gap in 2016 stood at 9 per cent contributing to a decrease of 7 percentage points, which is the highest recorded decrease in the VAT gap in the EU.
The report also shows that Malta’s effective VAT rate stands at 10.1 per cent. This is in line with many other Members States’ effective VAT rates including Germany and the Netherlands.
Minister for Finance Prof. Edward Scicluna comments: “This report confirms that Malta has once again shown that its tax enforcement and compliance systems to combat VAT evasion and fraud are among the best in Europe.”