Prime Minister and Labour Party leader Robert Abela was evasive on Thursday over his party’s tax arrears, saying he could only comment on matters since January 2020.

That was the month he took the helm of the country and party when former prime minister Joseph Muscat stepped down.

Abela was asked if he knew about any discrepancies between the amount of income tax and social security contributions deducted by Labour and the actual amount it passed on to Inland Revenue on behalf of its employees.

Video: Matthew Mirabelli, editing: Karl Andrew Micallef

Times of Malta understands that Labour’s media company, ONE, has agreements to cover unpaid tax and NI contributions amounting to millions of euros, including hefty fines. This newspaper also reported on Sunday that the media arms of both parties owe €5 million in unpaid VAT

Media.Link, the PN’s media company, says it is up to date with its income tax and social security repayment plans.

Asked whether tax contributions deducted from the salaries of Labour employees were passed on to the tax man, Abela said: “I can only comment on what happened since January 2020.”

He said he was not happy that both Labour and PN have “substantial” tax arrears.

Pushed to answer about the tax situation before he took over as Labour leader, he said any discrepancy, whether it is national insurance, VAT or income tax, are taxes owed to the state and must be settled. 

“Once there is a repayment plan which is being followed, the important thing is that the state collects what it is due.

“It is important that the employees’ NI gets paid for them to receive a pension. The ultimate principle remains that of fiscal observance,” Abela said.

The prime minister was similarly evasive about a 2016 draft deal that would have seen a Labour-linked company receive up to €200,000 from murder suspect Yorgen Fenech.

“That is an allegation made by the Times, so feel free to hand over any information you have. It is something which happened before January 2020,” Abela repeated.

Former Labour CEO Gino Cauchi has admitted to passing on the draft deal to Fenech, saying he did so on behalf of a “friend” who owned the company.

When this was pointed out to Abela, the prime minister repeated that it was an allegation in his eyes. He dodged the suggestion that an audit should be commissioned to verify the “allegations”. He maintained that the Times of Malta report was news to him.

“At the time, I was not even a Labour Party candidate… So, if you have any information, it is important to pass it on so we can look into it,” Abela said.

At the time of the draft deal, Abela’s wife, Lydia, was Labour’s executive secretary.

The Nationalist Party on Tuesday demanded a police investigation into Labour’s financing in light of the deal.

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