A tax audit into Labour MP Ian Castaldi Paris has uncovered hundreds of thousands of euros in “unexplained wealth”.

The backbencher was probed by the Tax Compliance Unit after he was first flagged by a local bank some two years ago. 

Sources privy to the audit said the MP’s “unexplained wealth” could see him have to pay upwards of €100,000 in taxes due. 

Castaldi Paris was already the subject of the review when he was elected to parliament via casual election in 2020 and has for the past few months been engaging with tax officials over the matter. 

Times of Malta understands that as recently as this week, Castaldi Paris met with fiscal authorities to discuss the findings. 

Replying to questions sent, Castaldi Paris said he had been the subject of “a standard audit” covering the years before he was elected to parliament.

He said the amounts in question were still being contested by his own auditor.

“I have paid my taxes every year and did not start paying my tax because I decided to contest elections,” he said.

Castaldi Paris said his meeting last Thursday was not at the Tax Compliance Unit. Instead, he claimed it was a meeting with tax authorities at his request over media reports suggesting he owned luxury property in London.

Sources have indicated that while this subject was indeed discussed, the meeting was with officials involved in the review of the MP’s wealth in Malta.

Asked to confirm whether the initial amount flagged by the tax authorities exceeded €1 million, Castaldi Paris said the amounts being discussed were “much, much smaller”. He did not elaborate. 

“I have paid my taxes every year and did not start paying my tax because I decided to contest elections”

The government has, in recent months, talked up a hard-line approach on tax evasion with

Finance Minister Clyde Caruana saying there will be no tolerance for tax dodgers. 

Replying to questions, a government spokesperson said the prime minister has always been clear and consistent that everyone should pay their tax dues.

“The prime minister will take any necessary decisions following the final outcome of the pending matter. Furthermore, an MP declaration of assets form is submitted annually by members of parliament, and the Commissioner for Standards in Public Life is endowed with the remit to review the correctness or otherwise of these declarations. To date, the prime minister has not been informed of any shortcomings nor of any investigation in this regard.”

Castaldi Paris has been in the eye of a storm since revelations last month that he had discussed buying a £16 million (€18.7 million) property in London, despite having only declared modest bank deposits to the house.

The matter stems from a leaked conversation he had with alleged Daphne Caruana Galizia murder conspirator Yorgen Fenech in 2019.

Castaldi Paris has claimed he was “bluffing” when he told Fenech about his interest in purchasing luxury property in both Malta and the UK.

Times of Malta revealed last month that the Inland Revenue Department has asked the UK authorities to share any information they may have about the MP.

According to obligatory financial filings made to parliament, Castaldi Paris has €18,200 in bank savings. He also declared ownership of a property in Lija, bought against a bank loan.

The MP, a notary, holds another three properties in Lija, Attard and Santa Venera via a Maltese company jointly owned with his wife. However, these three properties were not mentioned in his asset declaration form, with Castaldi Paris saying he did not list them as they are owned through the company, E&M Properties, and not in his name.

Soon after his conversation with Fenech was leaked, Castaldi Paris was removed from parliament’s Public Accounts Committee. His place on the committee was taken up by fellow Labour MP Jonathan Attard, following a motion by Deputy Prime Minister Chris Fearne.

Fenech had initiated the September 2019 chat with Castaldi Paris after getting wind of his interest in a €3.1 million property in Mdina.

The Tumas Group magnate apologised for muscling in on the property, saying he would be willing to cede a promise of sale if Castaldi Paris wanted the pricey property overlooking the Mdina bastions.

Castaldi Paris told Fenech he was considering flipping the large property in the citadel for a profit. He went on to tell Fenech he owns three properties in London and was now looking for a “big mansion” after losing out on the Mdina deal.

The Mdina property triggered another tax evasion investigation, this time into Labour MP Rosianne Cutajar after Times of Malta exposed her alleged role in brokering the deal for Fenech. 

Cutajar has faced claims she pocketed some €46,000 in cash for her role in facilitating the €3.1 million property deal.

Cutajar stepped down from her role as parliamentary secretary pending an investigation by Standards Commissioner George Hyzler. Once the commissioner found she had committed a number of ethics breaches, Prime Minister Robert Abela announced she would not be returning to cabinet. 

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