Monday, 7th September 2009
About time too!
Announcing his ministry's plans to recoup as much as possible of the € 600 million it still has outstanding from taxpayers, Finance Minister Tonio Fenech said that he understands that the ordinary taxpayer, like you and me, would flinch at the idea that these evaders will be given an amnesty which will see them pay back only the original amount they owe the Inland Revenue and only 10% of the fine they have accrued over the years.
I tend to disagree with Mr Fenech. My qualm is why did his department fail to collect these taxes before instead of waiting for the recession to bite and induce him to go for this measure? My criticism is why, in its 60 year existence, has not the Inland Revenue Department been able to collect the money due to it on time in order to avoid having to, periodically, announce an amnesty of this sort?
To be fair it is not just our local inland revenue which is resorting to such tactics. As they say, desperate times call for desperate measures.
Indeed, last Thursday, Her Majesty's Revenue and Customs (HMRC) announced that it had reached and agreement with the diminutive and secretive state of Liechtenstein which will see the latter pass on the details of British citizens who have stashed away money in this former tax haven. It is believed that there are 5000 such account holders and that these should net the HMRC around £ Stg 1 billion at the rate of roughly £ 200, 000 from each account. As the BBC commented, "Governments are particularly keen to trace and recover unpaid revenues as tax receipts fall in the global recession." (vide: Liechtenstein deal "to net £ 1bn" http://news.bbc.co.uk/2/hi/business/8237185.stm)
But back to Malta.
The Finance Minister, rightly so, added that this amnesty does not apply to VAT and Social Security defaulters. This is as it should be since such defaulters have not failed to pay money which they personally owe to the Inland Revenue but, far worse, they have failed to pass on money which they have already collected from consumers or employees onto the Government.
In this context, it is pertinent to point out that Mr Fenech was completely silent on the issue of the ring of VAT department fraudsters who ran a racket which cost the Government €10 million in unpaid VAT and bogus rebates. Admittedly the issue has been investigated by the Police and is now before the Courts. However, when the Finance Minister announces such hefty amnesties to people who owe the country loads and loads of money it is only natural to expect him to say what measures he is taking and what new checks and balances he is introducing to ensure that such fraudsters are nipped in the bud.
One may of course argue that when he announced the income tax amnesty plan on Friday, Mr Fenech was not talking about the VAT department. However, since for two Sundays now, the GWU weekly, It-Torca, has ran front page stories in which it stated categorically that it has information about a similar racket within the Inland Revenue department then it is incumbent on Mr Fenech not only to announce an amnesty for those who still have to pay their income tax but also to say what he is going to do to tighten up the Inland Revenue's operation, plug the holes and minimize, if not out-rightly eliminate, fraud and kick-back rackets.
As a matter of fact, Mr Fenech should be taking such measures within all the revenue gathering departments across the government in order to eliminate all possibilities of fraud which has to be aborted before it even raises its head. I say this because the Auditor General pointed out these short-comings at the VAT Department as far back as 2007 and nothing seems to have been done about it. In fact, the VAT racket was only uncovered because there was an honest businessman who informed the Police when he was approached to participate rather than get involved in such shady goings-on.
So no, Mr Fenech, I don't really take exception at the Income Tax amnesty you announced last Friday. But I do want to be assured that you are doing all you possibly can to crack down on any fraudsters that may be operating rackets in any department which is supposed to collect and generate revenue for the exchequer.
After the VAT Department saga and It-Torca's statements on Sunday August 23 and 30 respectively, it's more than about time too!
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Comments
The phrase "real Professionals" was coined by you to mean the authors of the book quoted by you "Judicial Independence" and the learned gentlemen who contributed to it. Prof J M Ganado was the one who contributed the section about Malta's misadventures.
Outside dictatorships, there can never be any justification for suspending the operations of the Law Courts. The Chapter quoted by you and written by “real Professionals” does not support your unbelievable and unsupported presumption that “the suspensions must have had a very good valid reason”. Those “real Professionals” clearly condemned the actions of Mintoff’s cabinet that is described as “nothing less than the collapse of the whole fabric on which the protection of the country’s constitution and civil rights is based”.
All the Constitutional Court suspensions mentioned must have had a very good valid reason and were loyal to the 1964 Constitution.
I have better things to do than to play an open ended ping-pong game which would never arrive to fruition. Using excerpts from Guido De Marco’s ,a then leading opponent of Mintoff and Edgar Mizzi’s, Mintoff’s leading legal advisor and a main player during that epoch would only result in a futile battle of wits. Our Constitutional amendments are too complex to be debated in a blog especially with the attendant risks of being edited by the moderator. Moreover I am not so presumptuous not to realise my lack of brain-power on such profound constitutional matters.
Having stated that, I still think that your observations cannot be left unanswered and would therefore invite you to peruse the conclusions of the real Professionals of the subject matter. Namely: -
Judicial Independence: The Contemporary Debate by
Shimon Sheettreet and Jules Deschenes (Editors)
Chapter 20. Malta. Page 226
Suspension of the Constitutional Court by Professor JM Ganado.
For a preview, Google ‘Judicial Independence: The Contemporary Debate. Google Books Results’
@CharlesJButtigieg
What the reanimated policemen took out of their pockets to disperse the mob attacking the law courts were truncheons - not batons, not tear gas canisters, not firearms - and that, apart from goodwill, was all that what necessary to disperse the mob out of Valletta.
"...When (Mr. Justice) Flores retired in 1972, no vice-president was appointed. The constitutional court could not function without a vice-president but Mintoff refused to appoint anyone to the post. This was an unacceptable situation that persisted for three years, from 1972 to 1974". (Vide: The politics of persuasion by Guido deMarco p107)
"No doubt about the fact that the main actors of that comedy were known Labour supporters and a few of them were canvassers and protégées of a former Labour Minister".
What difference does it make when the attack took place? You just confirmed that they were Labour thugs who were protégées of a former Labour Minister! So, this happened during a Nationalist administration. What exactly is your point? Maybe the thugs were just pretending they were Laburisti? By the same argument are you saying that the attack on the Twin Towers on 9/11 was the fault of the American government? Since when (in your fantasy) do terrorists, whether in Malta or the USA let the authorities know ahead of time when and where they intend to strike?
BTW, I do not need your urging to acknowledge that Dr. Sant stopped the violence. There!
For your info, the moderator chose to censor a relevant part in my last posting dealing with the attempt assassination of RCC which shows that the criminal element was on both sides of the political spectrum.
Our Constitutional Court was rendered inoperative for a period of about three years because the MLP government arbitrarily interfered with its theoretical independence in its judicial functions by passing a resolution conferring on the Minister of Justice to power to supplant decisions of the courts of law and to bypass the normal mechanism for the removal of judges. Two Constitutional Court Judges were removed from their duties by Presidential decree because of a preliminary judgment that displeased the MLP. This not my opinion but that of the International Centre for the Independence of Judges and Lawyers and the year was 1986.
“Be man enough to admit” that the ransacking of the Law Courts took place in the very first days of the NP administration much too soon for it to sanitize a corrupted Police Force that had been indoctrinated for years to turn a blind eye to the violence of “known MLP supporters” and “protégées of a former Labour Minister”. The Malta Police Force started to show its mettle a few days later, as soon as its command was transferred to the AFM Col. Spiteri. A small fragment of the police force still loyal to their oath of office and who were assigned to protect the Law Courts took out their batons and chased the mob out of Republic Street and as far as the Lion fountain in Floriana – an unheard of experience during the days of Cachia and Pullicino. That was even before Alfred Sant had any chance to weed out the violent elements only to watch them creep back soon after he relinquished the leadership of the MLP.
@ J Martinelli . Part Two.
Be man enough to admit that it had to be Dr. Alfred Sant in 1996 to clean up the Maltese Political Arena from that filth for which we, PN and PL, ought to be thankful for.
While on the subject ,I remind you that you still owe me a reply to the question “ When,for how long for and for which reason were our Constitutional Courts suspended”.
@ JMartinelli . Part One.
Your argument that the Labour thugs found it necessary to ransack our courts of law is a dim-witted suggestion considering that the brawl took place during a PN administration when the Commissioner of Police was “ let down by his men.” You and your precious former PN, now Gonzipn, can boast that the only time in the Maltese history that our courts became under physical attack happened during a PN Administration and four comedians, dressed as undertakers, were allowed to take over the premises unarmed. That was the day when our police force was branded ‘The Mickey Mouse Police Force”
No doubt about the fact that the main actors of that comedy were known Labour supporters and a few of them were canvassers and protégées of a former Labour Minister. That was the DNA of the political thugs up to 1996.
When I wrote “De mortuis nil nisi bonum” I was being true to my word so much so that I did not mention any names. Your unjustified deduction that I was referring to Lorry Sant is a typical instance of your irresponsible habit to jump to conclusions – and wrong ones at that. You cannot accuse me of being a hypocrite and if anyone was arbitrarily harming anybody’s reputation it was you. I do not intend to go on a wild goose chase looking for court records when I know what the MLP mobs did to court records and exhibits. I leave it to you to name this other MLP ex-Minister who led that mob.
One has to have a strong stomach in order to digest some of your comments such as: "... nobody ever doubted the integrity of our courts of law during the period 1971-1987, they were never accused of a miscarriage of justice to favour the administration, not then not now".
Then why was it found necessary for Labour thugs to ransack the Law Courts, burn files and smash furniture?
The fact remains that Judges were intimidated in the period you mentioned and many suspect that some sentences were handed out under duress. The atmosphere was poisoned and the stress was evident throughout the island and as far as I know Maltese Judges lived under the same conditions as the general public.
Your friend “arriving on the banana boat this morning” would be excused for being ignorant of facts happening 30 years ago but you have no grounds to “deduce” that I was “referring to the late Lorry Sant”. There is no “hypocrisy” on my part and I did not mention any “libel”.
I can tell you one very good reason why the Attorney General would not be capable or anxious to present evidence in court - that was the intimidation of witnesses not to testify against MLP stalwarts otherwise some pretext would be found to make them lose their livelihood! I am speaking from my own personal experience.
I do not question the integrity of our courts of law between 1971 and 1978. I do question their freedom demonstrate that integrity when they were publicly vilified, financially penalized, when cases were shuttled from one judge to another, until no more judges qualified to hear the case, when judges were made to play “musical chairs” and when even the operation of the Constitutional Court itself was suspended!
Please do not presume that everyone suffers from selective amnesia and please be careful before jumping to wrong conclusions, so called “deductions”.
‘De mortuis nil nisi bonum’? You are not going to harm his name or his family by publishing it in a blog? A person arriving on the banana boat this morning would deduce that you are referring to the late Lorry Sant -so why the hypocrisy?
Throughout the Labour Administration there were court cases where Ministers and Labour MPs were sued for libel and lost, nobody ever doubted the integrity of our courts of law during the period 1971-1987, they were never accused of a miscarriage of justice to favour the administration, not then not now. Doesn’t that tell you that the unnamed businessman must have slandered the late minister if the court sentenced him? How therefore do you expect the Attorney General to take legal action against anybody when the allegations were proved by our courts to be false?
The records of the proceedings of a court action are already public domain and therefore you would have had no trouble with your conscience had you given a vivid account about what the libel was all about.
The case in question was a newspaper item at the time. The name of the businessman who was actually taken to court and sentenced is unknown to me and I would not divulge his name without his consent if he were still alive. The MLP minister involved is very well known but he is now dead. According to the maxim “De mortuis nil nisi bonum” I am not going to harm his name or his family by publishing it in a blog just to humour your “Prove it”. If you contact me privately I will identify the MLP late Minister concerned – assuming that you do not know it already and that you are unable to ascertain it from MLP sources that would be more credible to you.
Prove it.
In the glory days of the MLP when a whistleblower reported that he had to pay a bribe to an Hon. Minister (now defunct) it was only the whistleblower who was hauled to court and sentenced!
What is wrong with you? Can one not present a working solution to a problem without you politicizing it? When I mentioned 'political will', the comment applied to any political entity be it blue, red, green or yellow.
But no, Joseph, you come across as if no hanky-panky went on under red Socialist governments. Shall I name a few? But no, I just remembered that you and your friends always insist that I forget your party's colourful past. Name me one Labour Minister who ever contacted the police to investigate a suspected fraud case within a government department and please do not insult my intelligence by saying that everything was kosher in those years.
So, for your own good as well as your party's, do me a favour and leave politics out when my comments had nothing to do with politics. However, having said that, I thank you for reminding me that at least there is one honest businessman in Malta and his name is not Joseph Buttigieg Attard!
DON'T YOU KNOW THAT THE "VAT SCANDAL" HAS BEEN GOING ON FOR YEARS AND IT CAME PUBLIC KNOWLEDGE ONLY BECAUSE ONE PARTICULAR PERSON REFUSED TO PARTICIPATE IN SUCH INSTITUTIONAL RACKET""
You should ask why your beloved Administration didn't take any sort of action when it was advised to years ago.
On each individual and corporate tax return should be a standard clause stating that the individual signing the document on his behalf or on behalf of a company acknowledges that he/she authorizes respective departments to refer any delinquent amount to a Collection Agency.
The Collection Agency is given the details of the overdue amount and proceeds (at the debtor's expense) against the individual/company owing the taxes. Seeing the amount owing grow by the CA's fees plus possible additional legal fees and accumulating interest, the debtor will soon realize that paying sooner is more economical than being forced to pay later.
Governments may have argued that such procedures may force a small company into bankruptcy and consequently employees lose their jobs. True enough, but then, is it not better to bankrupt a company which owes the government, say, e10,000 than giving it endless rope to hang itself with and forcing the company into bankruptcy when it owes e100,000? An amnesty to such a company which cannot pay the net owing let alone 10% interest/penalty is no incentive.