“Like a Ton of Bricks”: Malta Ramps Up Tax Enforcement

In a recent address to Parliament, Finance Minister Clyde Caruana announced a significant crackdown on tax evasion in Malta. Backed by new legislation and enhanced enforcement tools, the government is taking an uncompromising stance on non-compliance, with Caruana warning that the government will come down on tax evaders “like a ton of bricks.”

Full-Scope Tax Screening and Alarming Trends

At the heart of this shift is an overhaul of the Tax Compliance Unit. Previously, only 1% of taxpayers were selected for review. Today, the unit screens the entire taxpayer base monthly using advanced data analysis tools. The results are striking: over 80% of individuals assessed are being flagged for some form of tax non-compliance—highlighting both the scale of the issue and the state’s growing capacity to detect it.

Harsher Penalties and a Push for Repayment

The new enforcement framework introduces steeper penalties across the board. Interest on unpaid tax has doubled to 7.2%, and tax remission will now only be available after full repayment. Fines have increased from 15% to 25%, significantly raising the cost of evasion.

To illustrate the impact: a taxpayer with €1 million in undeclared tax could now face a total liability of approximately €2.5 million, once interest and penalties are applied. The message is clear—evasion will be met with consequences that far outweigh the benefit of non-payment.

Out-of-Court Settlements for Efficiency

Understanding the limits of the judicial system, the government has also introduced out-of-court settlement mechanisms. These allow tax liabilities to be resolved without lengthy court proceedings, while still applying substantial penalties. The aim is to accelerate recovery, ease pressure on the courts, and encourage more taxpayers to come forward.

Cultural Shift and Enforcement Strategy

Minister Caruana emphasised that this isn’t a short-term campaign, but a long-term enforcement shift. The upgraded compliance unit and new legal tools reflect a policy approach focused not only on recovering what is due but on changing taxpayer behaviour across the board. A cultural shift is needed—where paying tax becomes the norm, not the exception.

Looking Ahead – Final Remarks

Malta’s government is sending a clear and direct message: tax evasion will no longer be tolerated. With full-scale taxpayer screening, steeper penalties, and streamlined settlement options, the new approach is designed to close long-standing gaps in enforcement. Whether this marks a turning point in national compliance depends not only on the strength of the tools but on consistent and fair application in the months ahead.

Get in Touch:

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Matthew Aquilina

maquilina@quazar.mt / +356 2388 4600