Further cooperation between customs and tax authorities : a case study

Abstract

Customs and revenue departments are nowadays facing new challenges which are emerging through globalization. These challenges if not approached properly can potentially lead to huge revenue losses due to tax fraud or tax evasion. It is therefore in the interest of every Government that these risks will be addressed to minimize their negative effect. One way of how these issues are rightly dealt with is that of building a strong cooperation between the tax and Customs departments. A solid cooperation between these revenue departments can secure an improvement in efficiency and effectiveness in the services they provide, both in terms of curtailing tax fraud and tax evasion and in the other services offered to the taxpayers and businesses. In Malta, the need for further cooperation between Customs and the other tax authorities for these past years has been strongly felt. For this last decade a merger has been firmly considered. This approach of merging all the revenue departments has been adopted by several countries, however other countries sustain that very close cooperation between these departments suffices and that it is indeed more effective than a complete merger. The scope of this study culminated when through research and literature findings it was concluded that cooperation between these revenue departments is indisputably essential. It was also established that this cooperation must be further enhanced and that the concept of merging these revenue departments is indeed a very plausible approach to yield the best possible results from these departments, both in terms of control against revenue related crimes and in services provided to business, taxpayers and the general public.