Steward Health Care Loses Case Over €36.8m VAT Bill Due To Zero Payments
Steward Health Care Malta (SHC), the company that formerly operated three state hospitals, has lost a legal battle over a €36.8 million VAT (value-added tax) bill.
A judge ruled in favour of the tax commissioner, stating that the attempt to recover the unpaid taxes was not done in bad faith, contrary to the company’s claims.
The civil case was filed by SHC in an effort to revoke the garnishee order that had been granted to the taxman to recover the substantial tax bill.
The case was initiated following a previous ruling that declared the privatisation deal, which allowed SHC to run St Luke’s, Karin Grech, and Gozo General hospitals, as fraudulent. The court found evidence of wrongdoing at every stage of the process.
This court ruling provoked a strong reaction with the public with thousands flocking to the parliament to vent their displeasure and demand the government to take the hospitals back and get Steward to return the €400 million which allegedly have already been awarded to SHC and Vitals over their eight year tenure who had practically failed to fulfil most of their obligations.
Payments made to Stewart Health Care and Vitals Global Healthcare from 2016 to 2023
SHC meanwhile beefed up with an army of lawyers and have tried to pin the blame on the Maltese government and their previous deal with Vitals.
Back to the case, SHC had argued that the garnishee order was abusive because the tax commissioner was aware that the company was contesting a default notice regarding the outstanding tax bill.
The company claimed that it had discovered “serious anomalies in documentation” related to VAT when it acquired the shares of Vitals Global Healthcare Limited in February 2018, the original concessionaires of the hospitals.
Steward Health Care stated that it had approached the tax commissioner and reached an agreement to pay the outstanding amount in instalments until December 2037, with quarterly payments of €500,000.
However, Mr Justice Robert Mangion dismissed Steward’s arguments, ruling that the tax commissioner was acting within the bounds of the law and not in bad faith when seeking to recover the substantial amount owed in taxes.
The judge emphasised that the issue at hand was not whether the amount was due, as Steward had already conceded this, but rather the timeframe in which the payment could be made.
The judge further noted that Steward Health Care had never paid any VAT since taking over the hospitals in 2018, despite the fact that the company should have collected VAT from others and remitted it to the state.
Based on these findings, the judge concluded that the taxman’s efforts to collect the outstanding amount were not in bad faith and dismissed Steward Health Care’s case.
Steward Health Care Malta now faces the challenge of settling the substantial VAT bill, which will have a significant impact on the company’s financial situation.
What do you make of this new development?
READ NEXT: Court Denies Plea For Moral Damages In Liam Debono Hit And Run Case
