Nationalist MP David Thake’s company owes some €270,000 in unpaid VAT dues and is set to sign a repayment plan with the authorities.
Thake has been in talks with the Inland Revenue Department (IRD) for the past few weeks over a pending VAT bill owed by his company, Vanilla Telecoms.
Thake is the company’s chairperson and sole shareholder and is, therefore, personally liable for unpaid VAT according to law. Vanilla’s unpaid taxes stretch back a number of years.
Contacted on Wednesday, Thake confirmed the company had an outstanding bill of €270,440.
Of this, €233,515 consist of outstanding VAT while the rest of the balance is interest and penalties, he said.
On Thursday Thake said he had asked the Standards Commissioner to look into whether his company’s actions compromised his position as an MP.
On Wednesday Thake further explained that the amount immediately due stands at €174,790 as the rest of the tax had been deferred due to COVID fiscal measures introduced to help businesses weather the pandemic.
“I would point out that the government COVID tax deferral was intended to allow businesses to survive by bolstering their cashflow and, thereby, allowing them to keep their workforce in place,” he said.
“This is what Vanilla Telecoms, just like thousands of other businesses, have had to do.”
'Company owes VAT as it always declared every cent'
Thake added that the company owed the VAT because it had “always scrupulously declared every cent of its sales”.
He said the company’s VAT returns were filed on time and there was “absolutely no allegation of any tax evasion on the part of the company”.
Court action has been mistakenly filed by the police as it referred to ECO taxes that had in fact been paid
“The [VAT] department never requested payment for any amount. Our accounts department took the initiative to get to the bottom of the correct figures as the department’s website was not showing updated figures for the company since 2016,” he said in reply to questions.
Thake said that a voluntary repayment programme is being finalised and is set to be signed in the coming days.
Meanwhile, his personal tax situation is normal, Thake said, with no outstanding dues of any kind. The MP supplied a screen grab of his clear tax bill to substantiate this.
'Court action mistakenly filed by police'
Thake was contacted by Times of Malta after sources flagged how he was due to appear in court for separate tax irregularities unrelated to Vanilla Telecoms.
Asked about this, the MP said the court action, originally set for January 5, 2022, had been mistakenly filed by the police as it referred to ECO taxes that had in fact been paid.
He said the charges had since been withdrawn.
Thake made it to parliament by the slimmest of margins in March 2020, taking the 12th district seat vacated by former PN leader Simon Busuttil.
A former PN councillor in St Paul’s Bay, Thake had been a popular PN broadcaster and commentator prior to his election to parliament.
He was a vocal critic of former leader Adrian Delia who was ousted following months of internal party strife.
Thake is not the first member of the PN to have his tax affairs in the news.
Party leader Bernard Grech moved to settle several years of unpaid taxes when he entered the race to take over from Delia.
Times of Malta reported how Grech adjusted his declared income for 2016, 2017 and 2019, raising it from what he had previously claimed to have earned.
He eventually settled some €30,000 due and was issued with a tax compliance certificate.
On the other side of the political divide, Labour backbencher Ian Castaldi Paris earlier this month announced he would not be contesting the upcoming general election after Times of Malta exposed how he had high outstanding taxes and penalties.
The MP has agreed to pay back some €300,000 after a tax audit found hundreds of thousands in undeclared income.
This case is markedly different from that of Thake as it involves funds,in Castaldi Paris’ own accounts that had never been declared to the authorities and were flagged as suspicious by a local bank.
Rosianne Cutajar, another backbencher on the government’s seats, resigned as parliamentary secretary after Times of Malta exposed how she had allegedly accepted a bag full of cash for her role in brokering a property deal involving Daphne Caruana Galizia murder suspect Yorgen Fenech.
Her taxes and lifestyle are currently being audited by the fiscal authorities.
No one above the law: PL
The PL said in a statement this was another test for the Opposition leader.
"In the past days, Bernard Grech spoke about tax evasion and he now has a clear case of hefty tax evasion in his own parliamentary group...
"Grech will continue facing an issue of credibility because he himself continuously evaded tax up until accepting to become PN leader," PL said, adding that the authorities should look into the case as no one was above the law.
Two weights, two measures: PN
Reacting, the PN said in a statement that Prime Minister Robert Abela had a 'two weights, two measures' approach.
"He has called for action against a PN MP after his company did something that Abela himself has urged for: deferring tax payment to allow some breathing space for businesses.
"Thake has formally written to the Standards' Commissioner, calling for an investigation over whether he breached any ethical standards.
"On the other hand, Abela wants a PL MP to avoid investigations by the tax authorities over an unexplained €1 million."
The PN insisted that the police had mistakenly filed charges against Thake over missing tax payments that had actually been effected.
The party urged Abela to publish his income from 2016 onwards.
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