Former transport minister Austin Gatt is being investigated by the Tax Compliance Unit over the Swiss account he failed to include in his ministerial declaration of assets, The Sunday Times of Malta has learnt.
The investigation was prompted by newspaper reports about the account which became public knowledge during the election campaign when Labour Party reporters asked Dr Gatt whether he held a Swiss account.
Although the Inland Revenue Department refused to confirm an investigation was under way, sources confirmed it.
The IRD is precluded from divulging the information requested in view of the official secrecy provisions
The issue was first raised at a press conference in which the former Nationalist minister strongly denied any connection with the Enemalta oil scandal that became one of the major issues of the campaign.
Dr Gatt had admitted to inheriting the account after his parents passed away but said there had been no transactions for over 40 years. He also provided all the details necessary for the police to investigate and verify his claims.
However, Times of Malta last week reported that the police failed to conduct this investigation because “the requisite elements that are essential for such an investigation to take place are missing”.
The newspaper also reported that on February 18 – three days after the account became public knowledge – Dr Gatt wrote to the Speaker of the House to amend his annual declaration of assets for the years 2005 to 2011.
According to the information provided, his “managed fund portfolio” was valued at more than €700,000 in 2005 – when he “forgot” to declare it in his ministerial declaration of assets. The account maintained similar levels until it dropped to under €500,000 in 2008 due to the financial crisis.
Sources said this information prompted the Tax Compliance Unit to open a file on Dr Gatt and conduct a “risk analysis” to establish whether income tax had been sufficiently declared.
Sources saidit was normal procedure for the department to scan the newspapers and take the initiative on cases that could merit investigation.
However, the Finance Ministry refused to divulge any information about the case.
“The Inland Revenue Department (IRD) is precluded from divulging the information requested in view of the official secrecy provisions.
“The IRD also cannot divulge whether an investigation is being carried out or not pertaining to the individual referred to, due to the same secrecy provisions,” a Finance Ministry spokesman told The Sunday Times of Malta.
Commenting generally, the spokesman said taxpayers were obliged to declare income derived from their foreign investments (including interest) unless they used an authorised financial intermediary to deduct tax on the interest and remit it to the IRD.
“The IRD operates the self–assessment system and relies on income declared by the taxpayer. However, if it suspects an under-declaration, a tax audit can be initiated to investigate. If it results that income (in this case interest) has not been declared, or otherwise not covered by an authorised financial intermediary certificate showing tax deducted, then such income is brought to charge in an assessment,” the spokesman said.
“The taxpayer himself can also voluntarily rectify his omission. In any case penalties for the omission according to the law will apply, as well as interest on any unpaid tax applicable from the date when such tax should have been paid,” he added.
Dr Gatt declined to comment when contacted yesterday, saying: “You know my answer: The usual one.”
Whenever contacted after the election, Dr Gatt has pointed out that he is now retired and no longer in politics.
cperegin@timesofmalta.com