Foreword by the Minister for Finance and Employment

Tax revenues sustain all of the investments we, as a Government, commit to for the benefit of our country and its citizens, be it infrastructural or otherwise.

Tax revenues remain the largest source of funding for the numerous programmes and policy measures, largely of a social nature, which Government continues to provide to achieve a more equitable and just society. Consideration is also to be made that the population living on our islands, and hence needing to benefit from Government investments, programmes and initiatives, has widened significantly in the past decade; pushing further the funding requirements.

Despite pressures for larger revenues, to meet the growing financial needs of our country, I have remained determined in ensuring that this challenge is met as effectively and efficiently as possible, whilst maintaining the Government's commitment to not place any further tax burdens on the taxpayers.

This implies two things; 1) making better use of existing revenue, 'doing more with less', and 2) ensuring that all tax dues are collected when they are due. As a Minister for Finance, it is my responsibility to keep educating businesses and individual taxpayers to put an end to the mindset of delayed payments and systematic non-compliance, for the sake of good governance and fairness. It is also my responsibility to ensure that this transition is supported through visible and drastic changes in the Commissioner for Revenue.

Our country deserves an administration that ensures that taxpayers have modern, intelligent, and easy tools to allow them to comply. Our country deserves a tax and customs administration which is led by evidence, data, and analytics to pre-empt and tackle any remaining non-compliance. A tax and customs administration that is propped up with the best use of available technology, freeing up limited resources in so doing. Our tax and customs administration needs to be at the frontier of a modernised and accountable financial sector.

This three-year strategic report addresses this much-anticipated change. I invite all stakeholders, individual taxpayers and business taxpayers, to embrace and fully support the change they have been advocating for, for their benefit and that of our society.

Foreword by the Commissioner for Revenue

Given the significant impact that the Commissioner for Revenue has on the Maltese economy and on the lives of the Maltese through its tax collection and customs administration, we need to achieve excellence in everything we do.

We are doing a good job in many aspects of our operations, but we also know that we must improve in several areas to truly serve the Government and the Maltese in the years to come. Going forward, we must show that we are willing and able to do what is necessary to improve our service and demonstrate that we have the capacity to adapt and innovate in a world of rapid technological and demographic change.

On taking on the post of Commissioner for Revenue in February 2022, my focus has been on developing the capacity to transform the organisation into one which is more aligned with today's challenges, and which is consistently working towards the creation of a unified national Tax and Customs Administration. To this end, over the past year the Minister for Finance and Employment constituted the Tax Administration Review Group to start working on a strategic transformation of the Office of the Commissioner for Revenue. The Government also requested support from the International Monetary Fund and a mission from the Fiscal Affairs Department visited Malta to support this process. We have also consulted industry and practitioners through workshops as well as our employees and clients t hrough surveys.

This document sets out our strategic vision and implementation plan for the Commissioner for Revenue to transform itself in the years to come and to support the Maltese economy by delivering on its mission and vision. As the protectors of Malta's tax base, we must ensure that every Maltese, individual or body corporate, pays their fair share of taxes. This is especially significant given the current economic context. Our transformation is going to be primarily technology-led. We need to have an organisation that is using the latest technology in tax and customs administration using advanced data analytics, business intelligence and artificial intelligence.

The organisation will be investing heavily in transforming its technology infrastructure to prepare the foundations for real-time reporting. This investment will support our work and a better service to our clients. Making greater use of Business Intelligence and developing our application of advanced analytics will serve to inform new ideas and approaches to compliance, predict future trends, and help us to better tailor and time our compliance interventions for the best results.

Creating a better future begins by imagining the possibilities that lie ahead. If we are hoping to be more efficient and effective in the delivery of our programs to the Maltese people, we must cultivate a culture of exploration, experimentation, and innovation to discover how we can improve our operations. Fostering an innovative and data-driven organisation will allow us to create the future that our clients expect, while remaining agile in our ability to provide necessary services to Malta's tax base.

This transformation must also make us look inward and work towards making changes in our workplace organisation. Several structural and governance changes are underway which will make the organisation more accountable and ready to deal with the transformation plan being set out in this document. I want to see the organisation break down the silos that exist within some parts of it and truly achieve a unified tax and customs revenue organisation.

Our priorities are at the centre of this plan, and they allow us to adapt and remain agile in the face of uncertainty. With these priorities as our guide, this plan will set out how we will continue to fortify the social and economic well-being of all Maltese.

I am pleased to provide you with a plan that illuminates the path ahead by bringing our next three years into sharper focus. Our development as a tax administration is never complete, and I look forward to continuing the journey and to lead this transformation.

Introduction

During the past decade, Malta has performed strongly on the economic and employment fronts, making it one of the best performers in the European Union. Fast economic growth, a buoyant labour market, improved public finances, and higher spending power have supported Malta's economic and social development.

The Covid-19 pandemic has highlighted Malta's economic resilience as, contrary to many others, the Government had the capacity and ability to support the economy through targeted support measures that helped to stabilise the economy while preparing for the eventual rebound. With the global inflationary pressures and energy shock related to the Ukrainian conflict, Government continued to support the economy through the energy subsidies.

Government's fiscal standing has shifted into deficit whilst the downward trend in public debt was reversed. As a result, efficient and effective tax collection becomes critical for Government to rebuild its fiscal cushion.

To this end, Government has launched a strategic transformation of the Commissioner for Revenue to modernise the organisation into one which is data and technology driven.

Guiding principles

In defining the desired state of the organisation, four main domains are identified and form the basis of the transformation vision.

The categories of transformation are:

  • The customer – the Malta Tax and Customs Administration is envisaged as being a customer-centric organisation;

  • Efficiency and effectiveness – these are key attributes that the organisation aspires to achieve as a public sector organisation;

  • Agility and intelligence – given the fast-paced and data-driven environment the organisation is operating in, it requires these attributes to become efficient and effective; and,

  • The workforce – any future-proof organisation requires an empowered and knowledge-based pool of talent.

Based on the above principles, a transformation process is built and presented in this document and is based around three main pillars:

  • Awareness and education;

  • Compliance and enforcement; and,

  • Effectiveness and efficiency.

The following document defines a response to the external and internal environment while aiming to achieve the above principles and pillars.

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