[WATCH] Thake blames cash flow problems for outstanding VAT: ‘I chose to pay my employees’

Nationalist MP David Thake says the outstanding VAT owed by his companies is due to cash flow problems, insists this is not misappropriation 

Nationalist MP David Thake
Nationalist MP David Thake

Nationalist MP David Thake has blamed cash flow problems for the outstanding VAT payments his telecoms company has accumulated.

Thake insisted the issue was not one of misappropriation of funds when asked whether the outstanding payments predated March 2020 when the COVID tax deferral scheme came into force.

“When you are faced with issues of cash flow, and you have employees, you are faced with decisions, and this is a situation every self-employed or company director is faced with,” Thake said. 

Thake’s telecommunications company, Vanilla Telecoms, has a pending VAT bill of €270,000, with the Inland Revenue Department, going back a number of years.

Thake has admitted that according to the tax authorities, €270,440 is due, 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. 

“When I was faced with a decision as to whether to pay the government in time or pay my employees, I chose my employees,” he said.

MaltaToday later revealed that another company belonging to Thake, Maltashopper Ltd, owed over €500,000 in VAT. Thake insisted all dues by Maltashopper were the result of the tax-deferral COVID scheme.

The vociferous MP went on to call out government for weaponising its civil service to tarnish the reputation of its critics. 

“There are billions of euro in outstanding VAT and taxes. I am not justifying it, I am explaining the facts. Neither myself or my company have evaded taxes,” he insisted. 

“There are a number of court decisions on this issue. The fact that a business does not pay VAT is not misappropriation of funds. If you make a declaration, and you make a tax agreement and solve the issue, you are not misusing funds. It’s down to cash flow and that is why I submitted myself to the scrutiny of the Standards Commissioner.”

Speaking to the media outside parliament, Opposition leader Bernard Grech said he will be deciding on the party’s next step once the Standards Commissioner concludes his investigation.

“David Thake explained his position, he himself requested a Standards Commissioner investigation, and he will be investigated. He resigned as well from the parliamentary group. I will then decide on the next steps forward when all the details are out,” Grech said.