Sixteen suspected tax dodgers have paid fines to avoid criminal charges so far
Clyde Caruana says deals have yielded €3m in fines, with unpaid tax being repaid over several years
Sixteen individuals and companies with unpaid tax have avoided criminal charges by paying a fine since a new law allowing out-of-court resolutions came into effect last year.
A total of €3,044,161 in fines has been secured from taxpayers seeking to avoid criminal charges for tax evasion, Finance Minister Clyde Caruana said in response to a parliamentary question made by Nationalist Party MP Graham Bencini.
These fines stemmed from 11 agreements covering 16 individuals and businesses aimed at recovering over €34.2 million in unpaid tax.
Bencini was asking the minister to provide information regarding a controversial tax settlement law the government passed in August 2025.
The law allows for taxpayers who fail to declare their earnings to pay a fine of up to €1 million to avoid criminal charges.
At the time that the law was passed, Caruana warned tax evaders that the government would come down on them "like a ton of bricks," but the Opposition voted against the bill, arguing that it is a "gift to those who intentionally planned to evade tax".
Payment plans stretch up to 12 years
In his response, Caruana further revealed that of the agreements reached, seven have been settled in full, two were given a six-month term to pay, and one was given a nine-month term to pay.
One notable case is subject to a structured payment plan extending over 12 years.
The minister also explained how penalties are calculated based on progressive tax structures, with penalties rising depending on the amount of tax involved.
The first €1.5 million of unpaid tax is subject to a 15 per cent penalty; any amount between €1.5 million and €2.5 million is charged at 20 per cent; and any unpaid tax above €2.5 million is penalised at 25 per cent.
The new law has led to many high-profile court cases being dropped.
Lawyer Aron Mifsud Bonnici and accountant Nigel Scerri have already walked away from money laundering and tax evasion charges under similar deals.
Controversial car dealer Christian Borg has also reached a deal with tax authorities that could see him walk away from multi-million-euro money-laundering and tax fraud charges, thanks to the new law.
Most recently, former consul general to Shanghai Aldo Cutajar and his wife, Isabel, are negotiating a settlement with tax authorities regarding nearly €2 million in "suspicious payments" linked to Hong Kong.
The Daphne Caruana Galizia Foundation has recently slammed the law, stating that it encouraged bribery, corruption, and organised crime.