Nationalist Party leadership contender Bernard Grech paid off a number of outstanding tax dues this week after signing an agreement to bring his fiscal affairs in order. 

Times of Malta is informed that Grech has settled pending income tax and VAT dues and irregularities spanning a number of years. 

Sources said that last month Grech had entered into an agreement with Inland Revenue Commissioner Marvin Gaerty to resolve a number of outstanding issues. 

Times of Malta is informed that on August 12, just a few days after submitting his nomination for party leader, Grech signed an agreement to enter a payment plan with tax officials. 

Sources said he had adjusted his declared income for 2016, 2017 and 2019, raising it from that he had previously claimed to have earned. 

Sources also confirmed that the aspiring PN leader, a complete newcomer to the political scene, had, prior to regularising his position, not filed a VAT return for three years.

Grech, a family lawyer, works out of his office in Birżebbuġa, and advertises just four working hours a week.

Times of Malta is informed he was slapped with €2,000 in penalties and €1,300 in interest following late submissions of income tax.

“This is not a completely unheard of position for a self-employed professional, but it is still not a regular situation to be in and that is why we have these sort of agreements for people to get back in line. Really you would have expected him to do this sooner, but better late than never,” a source familiar with Grech’s situation said. 

During his meeting with tax officials, Grech is understood to have told authorities that he had experienced “financial difficulties”.

A look at Grech’s declared income shows he claimed to have made just €6,500 in 2009. This climbed to €15,000 in 2013, according to sources familiar with Grech’s tax situation. 

The source said that between 2014 and 2016 Grech was estimated to have under-declared his income and made adjustments in 2018. 

Another irregularity flagged in Grech’s fiscal position was his registration as an employer. Sources said Grech had signed up for what is known as a ‘permission to employ number’ back in 2007, however, he had never filed the paperwork employers are obliged to submit annually. 

He is understood to have claimed, when he was confronted with this shortcoming, that he never employed any staff. However, that does not exempt him from the need to file the necessary annual forms. Sources familiar with his situation described this as “careless rather than criminal”.  

Contacted on Saturday, Grech did not reply to a number of questions and instead sent a copy of his compliance certificate, dated September 2, saying it was “self-explanatory”. 

Grech is up against incumbent leader Adrian Delia, himself no stranger to financial trouble. On Tuesday, Times of Malta reported how Delia, also a lawyer, had filed his 2018 income tax returns a year late.  

In 2018, the tax authorities agreed on an €81,000 settlement with the PN and opposition leader for unpaid taxes.

Both Delia and Grech have submitted financial information to a PN commission tasked with carrying out a due diligence exercise on the prospective leadership candidates.

The election is expected to be held next month.

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