Updated 12.40pm - Added Revenue Commissioner's statement
A tax probe involving Konrad Mizzi, Keith Schembri and Brian Tonna is being reopened after it emerged that at least two of them also held accounts at Pilatus Bank, the Times of Malta learnt.
Government sources told this newspaper that the investigations by the Tax Compliance Unit were completed just a few weeks ago and were now being assessed internally for possible follow-up action. However, they added, the latest allegations would have to be considered.
“According to normal TCU practices, when a tax audit is carried out, the department normally seeks all necessary information about the investigated persons from the main traditional banks, Bank of Valletta and HSBC, in our case,” a TCU official said.
“The unit did not know of the existence of other accounts in Pilatus Bank. Since it has now resulted that the three gentlemen might have other bank accounts, which we did not look into, instructions were issued to seek information from all the banks in Malta and reopen the audit,” the sources said.
'No audit cases closed and reopened' - Revenue Commissioner
In a statement issued at 12.28pm, the Commissioner for Revenue denied that any audit cases "were closed and reopened" by the Tax Compliance Unit.
Allegations were "purely speculative and do not reflect the way in which such cases are investigated," the Commissioner said.
Tax investigations related to Panama Papers leaks were underway, they added, noting that tax authorities "do not comment on the outcomes of individual cases."
The reply did not address claims that investigators had missed Pilatus Bank accounts belonging to Panama Papers-linked officials.
This afternoon, Dr Mizzi stressed he never had any accounts with Pilatus Bank.
Busuttil's accusations
Earlier this week, Opposition leader Simon Busuttil said he had proof that Mr Schembri, the Prime Minister’s closest aide, had received kickbacks from Mr Tonna, who owns Nexia BT, as a commission on the sale of passports. The transactions, he added, were made through accounts both had in Pilatus Bank, which normally dealt with high-net-worth individuals.
Mr Schembri and Mr Tonna admitted such transactions had occurred and that they held Pilatus bank accounts. Mr Schembri said the €100,000 transactions were in settlement of a loan that he had made to Mr Tonna.
Investigations by the Tax Compliance Unit were completed just a few weeks ago
Dr Mizzi, the Minister Within the Office of the Prime Minister, denied that he had a Pilatus Bank account.
Questions to the Commissioner of Inland Revenue to give details on the results of the tax investigations on all three and to state whether the tax authorities had not been informed about the Pilatus Bank accounts remained unanswered at the time of writing.
Although soon after the Panama Papers leak in April 2016, Prime Minister Joseph Muscat had publicly said the tax authorities would conduct a complete audit on Dr Mizzi and Mr Schembri to “establish where the alleged millions from corruption” were, the results of such investigations were never published.
Both Dr Mizzi and Mr Schembri had admitted they had breached income tax laws because they had not declared trusts they had in New Zealand and companies in Panama as demanded by law.
Dr Muscat had said both would pay a fine for such omission.
When asked what fines had Dr Mizzi and Mr Schembri paid for breaching the tax law, the Commissioner for Inland Revenue failed to reply.
An audit expert told this newspaper the latest developments regarding Pilatus Bank indicated tax audits could prove to be “useless”.
“Those investigated might have accounts in many other banks. How can one know and will the tax investigators write to all the banks in the world,” he wondered.
“Secret financial vehicles are made for just one purpose: tax evasion and to remain secret,” the practitioner said.