A tax department board will decide whether a “paused” investigation into MP Rosianne Cutajar and her role in brokering a property deal should be handed over to the police or handled internally.  

The Tax Compliance Unit within the Inland Revenue Department is awaiting direction from a tax board over whether their investigation into potential tax evasion should be passed on for criminal investigation by the police or continue being managed internally as an “administrative concern”. 

“Since this case is relatively high profile and includes a politically exposed person, it was decided that a board should be convened to take the decision on how this matter should be handled going forward,” a source within the department said. 

The source added that the investigation was not concluded  and it has not yet established whether there is a case of tax evasion for which Cutajar or any other party to the property deal should answer for.

Times of Malta reported on Monday that the taxman had started an audit and investigation a few weeks after the newspaper first exposed the multi- million euro property agreement back in December 2020.

Inland Revenue Commissioner Marvin Gaerty had requested his staff to look into allegations that Cutajar received some €46,000 in cash for her role in brokering a €3.1 million property deal for alleged Daphne Caruana Galizia murder conspirator Yorgen Fenech.

They are understood to be reviewing her tax declarations and comparing this with her lifestyle and purchases. 

The authorities are also looking into other players in the deal, such as Cutajar’s associate, Charles Farrugia.

The Mdina property at the heart of a €3.1 million deal that fell through after Yorgen Fenech was arrested over the murder of Daphne Caruana Galizia. Photo: Chris Sant Fournier

Farrugia also acted as a broker in the property deal and was paid his hefty commission in cash. Fenech, and the seller of the property, Joseph Camilleri, also feature in the tax probe.

The investigation has been on the back-burner for several weeks as tax officials awaited the results of a separate probe by the Commissioner for Standards in Public Life, George Hyzler. 

That report was concluded last week and found prima facie evidence of multiple ethics breaches.

After the report was published, Cutajar was informed by Prime Minister Robert Abela that her temporary resignation from cabinet had been confirmed and she would not be returned to office.

She will, however, remain a Labour MP.

Abela told reporters on Wednesday that the investigation by Hyzler presented two diametrically opposed claims. 

There may, or may not, be agreement on the report but one had to respect the institution and follow the process, the prime minister said.

He did not weigh in on the tax review into Cutajar saying only that, if any shortcoming is found, she would be treated in the same way as anyone else.

“We cannot say we trust our institutions and then politicise such matters,” he said.   

Abela said the only fiscal inquiry he could speak with certainty about was one involving PN leader Bernard Grech.

That was a concluded investigation which found evasion of thousands of euros which were only settled when Grech decided to become party leader. 

Abela made a distinction between Cutajar’s ethical breach, which found that she had not declared income pocketed from a property deal as part of her MP’s declaration of assets, and a tax probe into the matter. 

The tax department was free to investigate what it saw fit and any such investigation would be independent, he said.

Abela, however, was evasive on whether Cutajar should be removed from the Labour parliamentary group.