Prime Minister Joseph Muscat specified yesterday Konrad Mizzi had still to pay a fine for breaking income tax laws, correcting what he had said the day before.
“Yesterday [Thursday], I said he would be paying a fine and then I said he had already paid. I now checked the procedure and [it results that] Minister Mizzi has filed an application so he comes in line with the law and the fine is still to be determined,” Dr Muscat said.
Inland Revenue Commissioner Marvin Gearty yesterday refused to state when he had started the legal procedure to prosecute Dr Mizzi.
“The Inland Revenue Department cannot divulge such information,” he told the Times of Malta. Mr Gearty, who according to Dr Mizzi will conduct a full audit in connection with his New Zealand trust and Panama trading company, was asked when he got to know that the minister had failed to declare his trust, as required by law, but no reply was forthcoming.
According to the Income Tax Management Act, Dr Mizzi was obliged to declare his overseas trust and interests within 30 days from the creation of this financial vehicle. However, on Wednesday, he publicly admitted he had not declared the trust.
When asked on Thursday morning whether it was acceptable that one of his senior ministers should breach the law, the Prime Minster said Dr Mizzi had already rectified the situation as he had already paid a fine. Tax experts say that, by law, Dr Mizzi had first to be prosecuted in a court of law and found guilty before paying a fine.
The law lays down that any person who breaches income tax laws “shall be guilty of an offence and liable on conviction to a fine” of between €116 and €1,160.
“The Prime Minster must either not be conversant with the law or was misinformed. Dr Mizzi could have never paid the fine in under 24 hours from his own admission,” a senior official at the Inland Revenue Department said.
The Nationalist Party yesterday accused the Prime Minster of “shooting from the hip in an attempt to conceal the growing scandal concerning Minster Mizzi and his chief of staff”.
PN deputy leader Beppe Fenech Adami said it was unacceptable “the public cannot believe any longer the Prime Minister’s words”. Dr Mizzi admitted he held a trust in New Zealand and had an associated trading company in Panama after the matter was exposed by blogger Daphne Caruana Galizia.
Dr Muscat defended Dr Mizzi saying he had no problem with the issue as long as the minister declared the financial structures in his forthcoming ministerial declaration of assets.
Income Tax Management Act:
Article 49: “Any person who contravenes or fails to comply with any of the provisions of the Income Tax Act or of any rules made thereunder shall be guilty of an offence and, unless another punishment is specifically provided by the Income Tax Act, he shall be liable on conviction to a fine.”
Article 56: “No prosecution for any offence against the Income Tax Acts may be commenced except at the instance of or with the sanction of the [Inland Revenue] Commissioner.