The Finance Ministry has shed light on a property transfer deal that will form part of a tax arrangement struck with developer Charles Polidano, while insisting that all amounts owed will be collected.
Times of Malta on Wednesday reported how Polidano, known as iċ-Ċaqnu, had reached an agreement to shave off part of a €40 million bill for unpaid taxes, following a meeting with a senior official at the ministry.
Polidano received a 30 per cent discount on his pending dues, which date back to the mid-1990s, and also agreed to forgo payment for land he had previously agreed to sell to the government.
It is understood that he has separately agreed to forgo payment on past works carried out for state entities, made a €7 million payment and has entered into a repayment plan to settle the remaining dues – less than €10 million - with the Inland Revenue Commission.
In a statement on Wednesday, the Finance Ministry insisted that “there will be no property-for-tax swap” for Polidano.
It then went on to detail how the Housing Authority would be acquiring a 2,000 square metre parcel of land in Luqa which Polidano owned, with money going to the Commissioner of Inland Revenue rather than the developer.
The ministry provided details about that arrangement.
It said that the Housing Authority had in 2019 issued a public expression of interest to acquire sizeable parcels of land to be developed into social or affordable housing.
One of the four proposals received, consisted of the Luqa land owned by Polidano, adjacent to another property which the Housing Authority already owned.
This parcel of land was subject to a valuation by three independent architects engaged by the authority’s evaluation committee, and a further valuation commissioned by the Office of the Commissioner for Revenue.
The ministry said it had been agreed that “on this deed of transfer, the Housing Authority will not be paying the purchase price to Polidano but will be delegated at law to transfer this amount to the Commissioner for Revenue, in settlement of part of the balance due by Polidano.”
The statement went on to add that all taxes due in connection with this transfer will be paid to the government.
In its statement, the ministry categorically denied that it had reached any sort of deal to reduce taxes owed by Polidano Group or related parties.
“The government will ensure that tax dues are collected and tax evasion curbed. This principle of fiscal morality has not and will not change no matter who the individual or company is. Not only that, but the ministry and its entities will ensure the proper collection of tax,” it said.
Any suggestions that the developer had his tax bill reduced was “manifestly unfounded and completely false,” the ministry said.