David Thake resigns from MP after reveal of companies’ VAT dues

Nationalist MP David Thake has submitted his parliamentary resignation over a debacle on his companies’ outstanding VAT dues.

Thake resigned just under two years since he was elected as an MP in a casual election, saying his credibility had suffered under the weight of the press stories.

The resignation comes days after reveals by both MaltaToday and earlier The Times of the MP’s companies outstanding VAT dues.

“I am guilty of having made an administrative mistake as a company director – more than that, I’m not guilty of anything… I was clear and transparent with all the facts when the press ran this story… honesty is my hallmark,” Thake said. “My standards are not those of Ian Castaldi Paris or of Rosianne Cutajar,” Thake said of the Labour MPs’ own tax scandals.

Thake said he would not be used as a deterrent that could reinforce a “criminal Labour administration” – “I am just a small part of the bigger picture. The public must expect the highest standards of those who have the privilege to represent the people in the parliament. There are people out there who think I have done something wrong, that I evaded tax, which is not true. I am not corrupt or a criminal... those are still in the House.”

Thake also said he had challenged Labour prime minister Robert Abela to reveal his own tax affairs, accusing him of having unexplained wealth and properies whose origins should be scrutinised.

Despite claims that his VAT dues were deferred under COVID-19 relief schemes, one of the MP’s companies failed to submit any of its annual accounts since incorporation in 2011, raising questions on whether it was even eligible for the VAT deferral scheme.

Thake later blamed cash flow problems for the outstanding VAT payments his telecoms company Vanilla, had accumulated. “When you are faced with issues of cash flow, and you have employees, you are faced with decisions, and this is a situation every self-employed or company director is faced with,” Thake told reporters outside Parliament. “When I was faced with a decision as to whether to pay the government in time or pay my employees, I chose my employees,” he said.

Thake’s telecommunications company, Vanilla Telecoms, has a pending VAT bill of €270,000, with the Inland Revenue Department, going back a number of years.

MaltaToday later revealed that another company belonging to Thake, Maltashopper Ltd, owed over €500,000 in VAT. Thake insisted all dues by Maltashopper were the result of the tax-deferral COVID scheme.

The vociferous MP accused the government of “weaponising” its civil service to tarnish the reputation of its critics.

“There are billions of euro in outstanding VAT and taxes. I am not justifying it, I am explaining the facts. Neither myself or my company have evaded taxes…

“There are a number of court decisions on this issue. The fact that a business does not pay VAT is not misappropriation of funds. If you make a declaration, and you make a tax agreement and solve the issue, you are not misusing funds. It’s down to cash flow and that is why I submitted myself to the scrutiny of the Standards Commissioner.”

While Thake requested an ethics investigation by the Commissioner for Standards in Public Life on his affairs, Opposition leader Bernard Grech did not raise any defence of the MP. “Thake explained his position, he himself requested a Standards Commissioner investigation, and he will be investigated. He resigned as well from the parliamentary group. I will then decide on the next steps forward when all the details are out.”

Thake suspended himself from the PN’s parliamentary group pending the ethics investigation. He had been shadow environment minister.

But the PN rebutted in a statement that prime minister Robert Abela was hypocritical to shield one of his own MPs who was caught with “up to €1 million in unexplained wealth” – a reference to Ian Castaldi Paris. Castaldi Paris will not be seeking re-election.

Thake also sued the Labour Party’s media over a story published last week alleging that he reached an agreement with tax authorities only after his outstanding dues were exposed by the media. The story, published on the online portal of One News as well as by One TV, was titled “Thake Ihallas Biss Wara Li Nkixef Li Ma Hallasx il-VAT.” Thake and his lawyer, Andrew Borg Cardona, said statements of fact in the story were false and were libellous, intended simply to tarnish his reputation.

Thake was elected to parliament in a casual election in March 2020, taking the 12th district seat vacated by former PN leader Simon Busuttil. A former PN councillor in St Paul’s Bay, Thake, he was also a vocal critic of former leader Adrian Delia who was ousted following months of internal party strife.

PN to co-opt Graziella Galea

The Nationalist Party thanked Thake for reaffirming his political responsibility, by resigning from Parliament, and withdrawing his candidacy from the party.

"Nationalist Party leader Bernard Grech has accepted David Thake’s resignation and thanked him for his contribution to the Nationalist Party and fighting to improve the standards in politics," PN stated.

Grech is proposing to the architect Graziella Galea to fill the vacancy in the parliamentary group by a co-option.  Graziella Galea is the minority leader of St. Paul’s Bay Local Council and also a candidate of the Nationalist Party on the 12th district.