PN MP David Thake blamed cash flow problems the outstanding VAT dues of one of his companies, saying that he preferred to pay his employees than pay the government on time.
Fielding questions from journalists about VAT issues which two of his companies have faced, the embattled MP denied that he was a tax evader or that he had misappropriated any funds, noting that there are past legal cases which show that when a business fails to pay its VAT on time then it does not equate to misappropriation.
Thake was speaking particularly about his company Vanilla Telecoms which was found to have a pending VAT bill of €270,000 going back a number of years.
Asked whether this constitutes misappropriation of funds, which is a crime, Thake said: “When you have a cash flow problem, and you have workers, you have choices to make. This is something that any self-employed or director has to think about.”
“Had I used that money to buy a yacht or a catamaran, you would be absolutely right and it is misappropriation of taxes. But if you look at case law, the fact that a business does not pay VAT is not misappropriation of funds. If you make a declaration that a company owes X amount you are not misappropriating funds. You can go, do a tax agreement and it’s solved,” Thake explained.
Asked to clarify whether his company’s tax issues were down to its cash flow, Thake confirmed as much.
“That’s why I submitted myself to the Standards Commission. This is a crucial point. Had I used the money for a luxury, it would have been fraud and misappropriation of funds. But when I had a choice on whether to pay the government on time or pay my workers, I chose to pay my workers,” he said.
Thake also made it a point to say that it was his belief that Malta’s public institutions had been “weaponised” as a tool to be used to damage particular individuals, such as himself.
He said that he had been totally transparent about his company’s tax dealings – even though it is a private enterprise and there is competition from other companies which make being transparent in such a manner “a big deal.”
That cannot be said, he pointed out, about government ministers who try and find every way possible not to answer about how public funds are being spent.
Asked briefly about his other company, Maltashopper Ltd, which was reported to have €550,000 in VAT outstanding, Thake said that the VAT had been deferred as a result of one of the government’s own Covid-19 economic schemes.
Thake resigned from his post in the PN’s shadow cabinet and suspended himself from the party’s parliamentary group on Sunday, pending the investigation of Standards Commissioner George Hyzler into the case.