The Government has a mandate to replace that tax with a system more suited to our economy and social structure, and also to make the overall tax system fairer. This White Paper issued after the Government took note of the views and proposals from a broad spectrum of the people, is an important step to fulfil that mandate. A tax reform only works if it is widely accepted by the taxpayers who will be involved in it. The aim of the proposed reforms is to make the system fairer and easier to operate, while making it more difficult for those who try to evade the system. In fairness to all those who duly pay their taxes, tax evasion will not be tolerated.
Fiscal morality is a fundamental necessary condition to a civil society.
In broad terms, the starting point of the reform is to move from the VAT which was introduced on 1 January 1995, to a system more suited to the Maltese economy and society. But it is necessary to do more than that. There were problems with our tax system before the introduction of VAT, although this new tax made things worse. Going back to the state of affairs based on that prevailing before 1995 is therefore not enough. The point of departure 1.10 It is important to distinguish between the needs of tax reform and the Government's annual need to raise the appropriate amount of tax revenue to finance sensible public spending.