Thake’s company to settle unpaid VAT with repayment programme

Nationalist MP David Thake has reached an agreement with the VAT Department for a repayment programme on the €270,000 VAT bill his company Vanilla Telecoms had to pay.

According to the tax authorities, Thake’s Vanilla Telecoms owes €270,440 in VAT going back several years, with €233,515 amounting to pending VAT and the rest being interest and penalties.

Thake was slated to appear in court today over a summons related to eco-tax payments, but the court case appeared on the list of withdrawn cases on the courtroom table. Thake told MaltaToday the court case on his eco-tax contributions had previously been erroneously classified as a VAT case.

He also told this newspaper that an agreement had been reached with the department but that it has not yet been signed due to office closures over the Christmas holidays and his accountant being in quarantine.

Thake, chairperson and sole shareholder of Vanilla Telecoms, had insisted his personal tax position is “normal” and that he personally owed nothing to the taxman. “All income has been declared in time and there is no allegation or suspect of tax evasion,” Thake said, adding that the police had erroneously filed a court case against him over eco-contribution tax which he said had already been paid.

According to the tax authorities, Thake’s Vanilla Telecoms owes €270,440 in back taxes, with €233,515 amounting to pending VAT and the rest being interest and penalties.

According to Thake, €174,790 are immediately due, while the rest had been deferred as part of the COVID measures to help businesses during the pandemic. “The system of COVID tax deferral was intended to keep businesses afloat and to save jobs. Along with a number of other businesses, we also benefitted from this scheme. I conclude by saying that tax is due, because the company has always been meticulous in its book keeping.”

The Labour Party accused Opposition leader Bernard Grech of lacking credibility in the face of this case of tax evasion. “Grech should not accept Thake’s reasoning blindly, having mentioned the COVID tax deferral scheme as partial reason for unpaid tax. This is a matter of unpaid VAT on almost €1.5 million in income and over a long span of time. The competent authorities must take this case seriously - no one is above the law, not even Opposition MPs.”

PN reaction

The PN pointed out the distinction between a deferred tax balance and unexplained wealth, arguing that the government itself was encouraging tax deferrals on declared income for businesses.

Thake himself had formally requested a formal investigation into his tax affairs by the Commissioner for Standards to ensure that he had not breached any ethical standards at any time, said the party.

“Here we have a case of another PN MP who was erroneously accused by the police. He was accused of not paying tax when in fact he had paid it, and in fact the charges were dropped. In the meantime a Labour MP is getting off easy after failing to declare up to a million euro,”  said the party, referring to news stories about Labour MP Ian Castaldi Paris, who was ordered to pay €300,000 in taxes and fines last month after a probe into his fiscal affairs found hundreds of thousands of euros in undeclared income. His unexplained wealth was reported at around the €1 million mark.