The Finance Ministry has shot down a report that construction magnate Charles Polidano  got a major discount on his tax bill.

Times of Malta reported on Wednesday that ‘ic-Caqnu’had managed to get his tax dues – some of which have been pending since the 1990s – from €40 million down to less than €10 million.

The newspaper said part of the original tax arrears was also set off against property he gave the government – one of which is for a social housing estate – and for construction and excavation works which his company had carried out for state entities and for which he was yet to be paid. The newspaper quoted sources saying that the original tax bill would have crippled the construction tycoon financially “beyond repair.”

In a statement, the Finance Ministry “categorically” denied that a deal had been reached with Polidano Group wherein a decrease in the tax due by the company and related parties to the government was entertained.

The allegation that the tax bill had been reduced to below €10 million was “manifestly unfounded and completely false,” it said.

“Minister Clyde Caruana is on record saying that while taxes will not be increased or new taxes introduced, the Government will 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. Not only that, but the Ministry and its entities will ensure the proper collection of tax.”

 As regards the other allegation that Polidano Group will be setting off a substantial portion of their tax arrears against property handed over to Government, there will be no property-for-tax swap, it said.

“The Housing Authority back in 2019 had issued a public expression of interest (“EOI”) to acquire centrally located and sizeable parcels of land to be developed for social or affordable housing. Subsequently, an evaluation committee was set up to evaluate the feasibility of each proposal. Three independent architects, who were not part of the evaluation committee, were requested to make a joint valuation of each site offered by bidders. One of the four proposals received by the Authority’s evaluation committee consisted of a 2,000m² 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. On this deed of transfer, the Housing Authority will 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. Furthermore, all taxes due in connection with this transfer will be paid to the Government.” 

The ministry said Times of Malta had failed to verify the facts and had not even sent questions.

“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.”

Polidano is no stranger to controversy.

One of the wealthiest men on the island, much of his wealth is in property – although some of that is subject to legal or administrative proceedings.

Just last year in fact, the Planning Authority brought to a halt illegal works at Montekristo Estates, where he has racked up over €700,000 in daily fines for illegal developments.

In November 2013, the Planning Authority had descended on the large site in Ħal-Farruġ accompanied by soldiers and police officers armed with automatic weapons. However, the PA’s hope of demolishing the illegalities on site was short lived after Polidano obtained a court injunction to stop the direct action.

The PA had said at the time that according to their estimates, illegal construction work in the area, owned by iċ-Ċaqnu, covered around 64,000 square metres of land.

Just a couple of weeks ago, Polidano got planning approval for his illegally built, five-storey head office just down the road from Montekristo Estates. 

The sanctioning came over a decade after the Planning Authority first issued enforcement notices against the development.