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Strategy and policy
Reforms and Investments

Strengthening tax compliance through implementation of real-time reporting in Malta

Supporting reforms to ensure efficient and effective revenue administration and public financial management

Funding Programme
Year
  • 2023

Strengthening tax compliance through implementation of real-time reporting in Malta

This project, supported by the European Commission, is aligned to the Malta Tax & Customs Administration’s strategy of modernising and enhancing tax compliance until 2025 and beyond. It aims to assist in the design and implementation of a real-time tax reporting system for payroll income tax and VAT. 

Context

The European Commission emphasised the importance of addressing tax evasion through digitalisation whilst simplifying compliance for taxpayers - motivated partly by the estimated VAT compliance gap (as a % of VAT Total Tax Liability) for 2021 and 2022 in Malta which amounted to 25.5% and 25.9% respectively. On this front, the Malta Tax & Customs Administration (MTCA) has begun collecting additional information from third party sources, and this project aims to enhance this capability by providing the Maltese government with a system to collect and process real-time tax information from businesses.

This project is aligned with the goals of the Digital Decade and OECD Tax Administration 3.0. 

Support delivered

At the end of the 18 month project the Malta Tax & Customs Administration will have at their disposal the following deliverables: 

  • Current State Report - a report assessing the current state of VAT and payroll-related income tax collection in Malta;
  • Good Practices and Benchmarks Report with the Design of the To-Be State - gathering good practices and benchmarks from jurisdictions that have already successfully implemented such systems;
  • Feasibility Study - Analysing solutions and feasibility of implementation;
  • Action Plan - a plan detailing how Malta Tax & Customs Administration can implement the selected solution;
  • Technical Specifications and Solution Architecture - technical specifications to implement a real time tax reporting system in Malta;
  • Communication and Change Management plan - communication plan supplemented by change management activities to address stakeholder acceptance;
  • Capacity Building and Training Materials - a needs assessment and training on change management and train-the-trainer workshops.

Results achieved

Over the course of the project, the project team will conduct workshops and stakeholder meetings with pertinent consultees to ensure that the outcomes of the project are targeted, relevant, and aligned to the objective of compliance by design. 

This project prepared the MTCA to introduce real time reporting for businesses in Malta by engaging with internal and external stakeholders to produce an actionable detailed implementation roadmap, including technical requirements, for the real-time tax reporting systems in Malta. This will contribute to addressing the tax gap in Malta as well as enhancing tax compliance by further digitalising the tax data processing experience.

More about the project

You can read the documents related to the project here: