Libyan CEOs of Malta companies got tax break in 2013

The bosses of Libyan companies operating in Malta will not be paying any income tax in 2013.

The details emerged in a parliamentary paper laid in the House in July, and reported by specialist news agency Maghreb Confidential.

According to a February 2013 decree by then finance minister Tonio Fenech, various Libyan directors and managers employed in Maltese-owned companies like the Corinthia Hotels International group, or other joint-Libyan enterprises, were spared from paying income tax.

The tax exemption was granted by the minister under powers he enjoys from the Income Tax Act, to officials of the Libyan Foreign Investment Authority (LAFICO) who were seconded to companies in which LAFICO has a shareholding.

The companies included Corinthia Hotels International, Golden Tulip Vivaldi Hotel, LAMHCO, Medavia, Mediterranean Power Electric Co Ltd, Medelec Switchgear Ltd, and Universal Inspectorate and Services.

Those enjoying the tax break included Fathi el Wafati, CEO of Med. Power Electric, a joint venture between Libya, Malta and Britain's Hawker Siddeley, and Abdelwahab Bitrou, manager of Medelec Switchgear, a joint venture between LAFICO, Malta, Alstom Grid and Schneider Electric.

Medavia managing director Abdulrazagh Zmirli also benefited from the tax break. Zmirli is also a Maltese citizen. In December 2012, he was seized and imprisoned by Zawija militias, together with Medavia's technical general manager Abdalla Dekna. Dekna too enjoys a tax holiday in 2013.

Zmirli and Dekna were arrested following claims that they helped the Gaddafi regime during last year's conflict.

Zmirli kept Medavia going and retained its employees despite the upheaval in Libya during the uprising against the regime of dictator Muammar Gaddafi.

Medavia was one of several joint Maltese-Libyan ventures indirectly affected by EU sanctions imposed on the Libyan Foreign Investment Company during the war.

Zmirli, an engineer, was previously a non-executive director of Corinthia Hotels and occupied a similar non-executive post at Mediterranean Investment Holdings.