PN leadership candidate Bernard Grech has a history of unpaid taxes

Lawyer Bernard Grech has twice been called up by the Inland Revenue Department to settle years of unpaid income tax and even VAT, but the contender for the post of Nationalist Party leader has refused to declare when he formally settled his tax problems.

Court records show Grech, 47, was asked in 2006 to settle a hefty bill for unpaid taxes between 1990 and 1996, and then again in 2012 for the years 1999-2011. Even more recently, he was asked to settle VAT assessments for 2014 to 2019.

But Grech has not confirmed with MaltaToday why he had not paid tax for so many years on end, nor has he shared the date on which he reached a settlement to pay his tax bill in full.

Although this newspaper is informed that Grech settled his pending affairs as late at 10 August, 2020, the leadership contender only provided MaltaToday with a compliance certificate from the Commissioner of Revenue dated 2 September 2020.

While both Grech and incumbent Adrian Delia are being audited by the PN’s candidates commission, the party said it will not be issuing any declaration on the candidates’ suitability resulting from its vetting of their affairs.

Yet documents seen by MaltaToday suggest Grech has a proven record of not paying his tax bills on time – even if he has refused to explain why – having received a number of warnings for failing to pay his income tax and VAT, over €60,000 in total, over two decades.

In June 2006, the IRD sent Grech an assessment for taxes owed for the years 1990 to 1996, for a total of Lm1,135 (€2,643.84). The IRD had warned Grech that he owed Lm31, Lm105, Lm98, Lm179, Lm191, Lm252 and Lm279 respectively for these years.

That warning went unheeded, as in October 2006 the IRD took the matter to the Magistrate’s court to procure a new warning for Grech to pay the amount due within two days or face further legal action.

Six years later, in June 2012, the IRD sent Grech another assessment seeking his income tax for the years between 1999 and 2011 (except 1997 and 1998), for a total due of €33,684.

Once again, Grech appears to have ignored the IRD’s warning because in October 2012, the First Hall of the Civil Court once again issued an official notice for Grech to pay the full amount due within two days.

Grech did not confirm when asked how he had settled each individual assessment. MaltaToday is informed the lawyer settled the full amount in monthly instalments but settled the pending sum in full close to the day he applied to contest the PN election.

MaltaToday is also informed that Grech had pending VAT returns that were not paid annually.

For 2014 to 2019, Grech – a family lawyer – declared modest incomes of €37,500, €33,200, €30,900, €33,426, €31,819 and €28,790 respectively, but failed to pay the VAT he owed, over €29,000.

Sources told MaltaToday that Grech agreed to another payment programme, this time with the VAT Department, to repay the VAT he owed over a period of time.

But again, Grech refused to explain to MaltaToday what arrangement he had reached to settle his taxes.

A spokesman for the candidate would only provide a certificate issued by the Commissioner of Revenue stating that Grech has no pending tax, VAT or PE bills dated 2 September 2020 – four days ago.

MaltaToday also asked Grech how, with an average annual income of €32,600 declared in the years 2014-2019, was the lawyer able to afford settling his VAT bill of over €29,000. No answer was forthcoming.

Questions sent to Bernard Grech 

1. In 2006 you received a notification from the IRD instructing you to settle payments for unpaid taxes for the years 1990-1996; and a second notification that year to settle, for Lm1,135: when did you settle this payment to the IRD [date], and why had you not paid your taxes in these years? 

2. In June 2012, you received a new IRD assessment for the years 1999-2011 calling upon you to settle €33,684 in tax, interest and penalties, and a second notification in November 2012 to settle this amount: when did you settle this payment to the IRD [date], and why had you not paid your taxes in these years? 

3. What other assessments concerning unpaid taxes are you currently settling with the Inland Revenue Department? 

4. You were instructed by the VAT Department to pay unpaid dues for the years 2014, 2015, 2016, 2017, 2018 and 2019. When was the date that you settled these payments? What was the amount of the settlement? Why did you not settle your VAT returns in a timely manner for the years 2014 – 2019? 

5. Given that your average annual declared income to the VAT department for the years 2014- 2019 was €32,600, can you explain the origin/source of the funds that you used to settle the outstanding VAT owed to the VAT Department after 2019? 

Bernard Grech reaction

On Sunday afternoon, after this newspaper printed its findings, Bernard Grech claime he was able to answer any questions over the issue, but that he does not want to “prejudice” the due diligence test being carried out on the PN’s leadership candidates.

“Since the very start of the due diligence exercise I have authorised the panel of experts to fully investigate every financial aspect related to myself, including detailed information about me in possession of the tax department,” he said.

He said that he has answered every question raised by the panel. “I will be publishing the full report once it is in my possession,” Grech said, saying he wants the general public to be fully informed on his tax situation.