Tax settlement law 'encourages bribery, corruption' - Daphne Foundation
The law is protecting perpetrators from criminal punishment and stripping away the autonomy of the chief prosecutor
A law that enables the cancellation of criminal charges through a settlement agreement with tax authorities encourages bribery, corruption, and organised crime, the Daphne Caruana Galizia Foundation said on Monday.
"The Malta government’s Bill 142 undermines the criminal punishment of the corrupt when witness testimony or other evidence of corruption is not available to prosecutors," the foundation said in a statement.
Malta’s former consul to Shanghai and his wife are the latest to seek a deal with tax authorities to end money laundering and tax evasion charges against them, Times of Malta revealed on Monday.
Aldo and Isabel Cutajar are implicated in nearly €2 million in suspicious payments from Hong Kong, made while he was a full-time public official. In 2020, the couple were charged with money laundering and pleaded not guilty. They are now seeking a tax settlement which will extinguish all criminal charges against them, claiming that they were never charged with corruption in the first place.
The law excludes settlement for crimes related to corruption.
The foundation noted that the Cutajars join a growing list of high-profile cases where the accused walk away from money laundering and tax evasion charges thanks to the new law.
Among them were Konrad Mizzi lawyer Aron Mifsud Bonnici, Nigel and Mikaela Scerri, the accountants in business with former Prime Minister Joseph Muscat’s close friends Diane and Karl Izzo, and car dealer Christian Borg, a former client of Prime Minister Robert Abela.
Mifsud Bonnici was accused of money laundering, tax evasion, and making false declarations to the MaltaTax and Customs Administration (MTCA). On July 23, 2025, more than €1.6 million of Mifsud Bonnici’s assets were frozen in a court order as part of the case.
Nigel and Mikaela Scerri were arraigned in January 2025 on tax evasion and money laundering charges when authorities reportedly discovered a €1.5 million discrepancy in their tax and VAT declarations.
Christian Borg was charged in a €1.6 million tax evasion and money laundering case, and was previously charged with kidnapping in a separate case.
Borg’s current tax settlement agreement also covers his co-accused, Monique Mizzi, and Joseph Camenzuli, a former Labour Party photographer.
"Malta’s ability to tackle tax evasion was a reason it was placed on - and later removed from - the FATF GreyList. Bill 142 is not a solution. It encourages bribery, corruption, and organised crime by protecting perpetrators from criminal punishment and strips away the autonomy of the chief prosecutor," the foundation said.