Steward Health Care Malta has lost a case over a €36.8 million bill in unpaid taxes, with a judge ruling that the tax commissioner’s attempt to recoup the money was not done in bad faith, as the company had claimed.
The company that used to run three state hospitals had filed the civil case against the inland revenue department in a bid to get the court to revoke the garnishee order successfully granted to the taxman over the pending hefty tax bill.
The case was filed in April, a month after a judge annulled the “fraudulent” concession granted to it by the government to run St Luke’s, Karin Grech and Gozo General hospitals. The court declared that the privatisation deal was fraudulent, with evidence of wrongdoing at every stage of the process.
Steward Health Care was responsible for running the three hospitals as part of a multi-million deal it took over from the original concessionaires, Vitals Global Healthcare (VGH).
Before Mr Justice Robert Mangion, Steward Health Care claimed that the garnishee order was abusive since the taxman knew that it was contesting a default notice over the pending tax bill amounting to €36,816,847.54.
The company told the court that when it had acquired the shares of Vitals Global Healthcare Limited in February 2018, it had discovered “serious anomalies in documentation” related to VAT.
It said it had approached the tax commissioner on this and had reached an agreement to pay its due over a period of time. Steward had asked to be allowed to settle by December 2037 and agreed to pay €500,000 quarterly.
Mr Justice Mangion rubbished Steward’s arguments, ruling that the tax commissioner was not acting in bad faith but was following the letter of the law when he sought to recover a huge amount of tax due to the state.
He also said that the question was not on whether the amount was due, because this was conceded by Steward, but over the time it could pay the amount.
The judge noted that Steward never paid any VAT since it took over the hospitals in 2018, most of which it would have collected from others but failed to pass them on to the exchequer.
He found no bad faith in the taxman’s efforts to collect what is due and threw out Steward’s case.