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‘Untruthful’ Ċaqnu Tax Bill Report Undermines Social Contract Between State and Tax Payers, Finance Minister Says

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Finance Minister Clyde Caruana has slammed the Times of Malta for a report this morning which said that construction magnate Charles Polidano, known as Ċaqnu, had had a €40 million tax bill slashed to less than €10 million following talks with senior government officials. 

In a statement this afternoon, Caruana denied that tax arrears would be set off against property handed over to the government. Rather, he said that rather than paying Polidano Group for property it had already agreed to sell the government, the funds would be redirected towards the tax department. 

Such untruthful articles undermine the social contract between a State and its taxpayers, by giving the impression that appeasement is given to the preferred, when in reality the Government has embarked on an exercise to collect tax arrears which have remained uncollected for decades, giving all taxpayers fair and equal treatment to regularise themselves within the parameters of the law,” Caruana said. 

He accused the paper of failing to verify the fact before publishing, adding that “a credible newspaper ought to do better”.

According to the paper, the agreement will see Polidano setting off some of his tax arrears against work done for state entities for which he has not yet been paid, as well as properties handed over to the government.

In his statement, Caruana categorically denied that a eal had been reached that would see Polidano Group pay less tax than is owed. 

“As is publicly known, this commercial private entity owes the State substantial tax amounts which run in millions of Euros, with arrears of over twenty years,” read the statement. 

The minister said he was on record saying that while taxes will not be increased by the present administration, efforts are underway to “ensure that tax dues are collected and tax evasion curbed”. 

“This principle of fiscal morality has not and will not change no matter who the individual or company is,” Caruana said. “Not only that, but the Ministry and its entities will ensure the proper collection of tax.”

Caruana said that back in 2019, the Housing Authority had issued a public expression of interest to acquire centrally located, and sizeable parcels of land, to be developed for social or affordable housing. An evaluation committee was set up to evaluate the feasibility of each proposal. 

 “One of the four proposals received by the Authority’s evaluation committee consisted of a 2,000 sq.m parcel of land at Luqa currently owned by Polidano Properties Limited, adjacent to property already owned by the Housing Authority. This parcel of land was subject to a valuation by the architects engaged by the evaluation committee and a further valuation commissioned by the Office of the Commissioner for Revenue,” Caruana said. 

He said that on this particular deed of transfer, the Housing Authority would not be paying the purchase price to Polidano but will be delegated at law to transfer this amount to the Commissioner for Revenue, in settlement of part of the balance due by Polidano. 

Moreover, the minister said that all taxes due in connection with this transfer will be paid to the Government. 

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