Gonzi, Fenech responsible for VAT fraud, says Muscat

Prime Minister Lawrence Gonzi and Finance Minister Tonio Fenech should shoulder political responsibility for the VAT scandal that rocked the department in 2009, according to Labour leader Joseph Muscat.

Speaking on the television programme Realtà, Dr Muscat said a politician was responsible to safeguard the interests of the country and its people and not his own personal interests.

He said Mr Fenech was politically responsible for the serious shortcomings in the VAT Department that were highlighted in an internal report.

The report was commissioned by the Finance Ministry in the wake of a fraud scandal that hit the department three years ago, leading to convictions against several businessmen and, so far, one VAT employee.

The report, published on Monday, identified “a grave risk” of insider fraud and lack of accountability and risk awareness. The VAT Commissioner denied the charges.

Dr Gonzi has ruled out the possibility of any resignations, saying the government had shouldered political responsibility when it took action and people ended up in court.

Dr Muscat also raised the case of Mr Fenech’s former personal secretary, Noel Borg Hedley, who this week pleaded guilty to receiving bribes from property developers JPM Brothers Ltd between April and July 2008 to reduce or waive fees connected to under-declaration of property deals. The fees were regulated by departments that fell under the Finance Ministry.

“Minister Tonio Fenech cannot continue acting as if nothing happened while Dr Gonzi continues to be passive (about it) as if he were his hostage,” Dr Muscat was quoted as saying by the Labour Party.

On the issue of divorce, Dr Muscat said he would be voting in favour of its introduction, even if he were the only one to do so. He said two separations a day were being granted by the courts while divorce decrees obtained abroad were being recognised in Malta. Moreover, no other alternative was being presented to help couples facing problems.