A VAT Inspector told a court today how he had been 'offered' €100 from senior VAT Inspector Paul Scicluna in order to close an eye to the fact that a ledger had not accompanied a correction letter sent by a client who wished to correct his VAT return.

Paul Scicluna, who himself prosecuted several cases of alleged theft, is being accused of corruption.

Vince Vella, who is also a VAT inspector, explained how VAT-registered persons can send correction letters to amend their VAT returns. Such letters have to be accompanied by ledgers to support their claim. Clients are fined 10% of the outstanding value.

Mr Vella said that at one time he was called to Mr Scicluna's office. Mr Scicluna handed him a correction letter with a cheque for the 10% fine but no ledger. He also placed €100 on the table.

Mr Vella said that he reported the incident the next day the VAT Commissioner.

The VAT Commissioner confronted the two men the next day and at the meeting Mr Vella said he admitted to taking the  €100 'in panic'.

During today's proceedings, Anthony Scicluna, a VAT-registered person said he had been prosecuted by Paul Scicluna and was fined heavily. One day he was having a drink in a Birkirkara bar when he heard somebody say that if one had problems at the VAT Department, he should call Vince Vella, as he could 'forgive' some of the outstanding amounts.

Mr Scicluna said that what he had heard made him extremely angry and he told Paul Scicluna, the person who had prosecuted him.

The case continues.