Ministry insists ‘defrauded’ man should repay taxman

The tax department could soon provide people the option to pay their bills directly without involving a notary in the transfer of money, the finance ministry has said. 

Reacting to the MaltaToday report on a man who claims to have been defrauded by a notary whom he entrusted with paying his deceased brother’s succession tax, the ministry said the Inland Revenue Department (IRD) is looking into the possibility of allowing customers to make duty and tax payments directly themselves. 

Despite providing evidence to the IRD and filing a police report that the money he gave to his notary, Philip Said, to pay the succession tax was used to pay somebody else’s tax, Albert Mamo has not been given the money back and the tax department insists that he should make the payment anew.  

The finance ministry told MaltaToday that “any allegations for the payment of damages incurred by the client should be directed by the client against the notary and not against the government,” adding that any damages incurred by the client “have to be borne solely by the notary.”

Mamo has raised the issue with Prime Minister Joseph Muscat, finance minister Edward Scicluna and justice minister Owen Bonnici. However, while everybody acknowledges that Mamo has been defrauded, the finance ministry said “the amounts are still due to the government and from the government’s point of view, it is up to the client to pay such amounts and then to claim such amounts from the notary.”  

The ministry argued that a notary has a dual function, a public official who at the same time acts as an independent and free professional. These functions and responsibilities are separate but a notary must safeguard both the public and private interests, the ministry added. 

In reaction, Mamo told MaltaToday “a notary is a public official who acts on behalf of the government and therefore the government should assume responsibility for whatever a public officer does.” 

Mamo was told by finance minister Edward Scicluna ‘Albert, it seems you have been robbed on the way to pay the IRD. We are prosecuting the robber for fraud. You have to get the money from the fraudster by a civil case. In the meantime you owe the IRD money. These are the facts. If there was a legal way to get you the money back, we would. There isn’t.’ 

“However,” Mamo told MaltaToday, “the IRD commissioner, Marvin Gearty, told me that I should be rightfully given my money back, but this he said would create a precedent and the department did not want to go there.”

Mamo is adamant that he will not make a new payment before the “stolen” money is returned to him, especially since “this was not a mistake done in good faith.”  

The notary involved, Philip Said, has faced multiple charges of misappropriation, and the finance ministry has confirmed that “we had reported Notary Said on other cases.”  

Following Mamo’s complaints in 2014, the head of the Capital Transfer Duty Department, Patrick Grima, wrote to former inspector Daniel Zammit, son of the former acting police commissioner Ray Zammit, who at the time was a member of the Police’s fraud squad. 

Daniel Zammit was himself embroiled in controversy last year, when the Attorney General said he was “unethical” in his role as co-prosecutor in the murder charges against Stephen Caruana, the son-in-law of Joe Gaffarena, with whom Zammit and his family are in business. 

Zammit was controversially medically ‘boarded out’ of the police corps in May 2015.

Moreover, the ministry added, notaries who fail to pay duty or are in breach of the Duty on Documents and Transfers Act, are liable to a penalty of between €11 and €465. 

Mamo had used the services of his long-time friend, Said, to pay the succession tax or causa mortis on the property inherited by his deceased brother and gave the notary a bank draft for €4,195, payable to the Commissioner of Inland Revenue.

After seeing that the monies had been withdrawn from his bank account but the deed had not been registered, Mamo paid a visit to the department’s offices in Valletta and was shocked to discover that Said had used the bank draft to pay a stranger’s withholding tax bill. 

After presenting all the evidence that his bank draft had been cashed by the Commissioner, the IRD’s cash office in Floriana issued a new receipt after replacing the stranger’s details with Mamo’s. The finance ministry argues, however, that the fact that an IRD official manually changes the receipt and later reverses the decision, does not entitle or give the client any legal basis to claim any damages from the government. 

Said’s daughter, Jessica, offered to register the deed but she was stopped from doing so by the head of department, Patrick Grima.    

In a meeting with Grima, Mamo was told that despite the money being cashed by the IRD to pay somebody else’s tax, the department would not be returning the money or transfer the payment to cover his brother’s succession tax.  

Mamo has reported the matter to the police and legal action is under way. Said still appears on the notarial council’s official online list of enrolled professionals and the council has so far failed to answer questions on whether any action was taken against the notary.