Konrad Mizzi declared €37,500 rental income since 2013

Energy minister Konrad Mizzi has declared just over €37,500 in rental income over 2013 and 2014, according to tax returns provided to MaltaToday on request to the House of Representatives.

The information was requested in the light of Mizzi’s statements since admitting in February that he owned an offshore company in Panama and an offshore trust in New Zealand.

Mizzi had said the structure was intended as a family trust for assets and investment, and prospective investments include the leveraging of his property in London.

Mizzi had also said his trustees, Orion Trust New Zealand, would manage “future investments which will seek to attain a reasonable return for the beneficiaries”.

But Mizzi yesterday refused to tell MaltaToday the address of his UK property, sought in a bid to ascertain its value.

“Minister Mizzi pays due taxes both in the UK and Malta. His tax statements have already been made public in the media. Recently Minister Mizzi has subjected himself to a fully-fledged tax audit which no other politician has done in the history of Malta. He is fully collaborating on this because he has always acted fairly,” the energy ministry said.

Mizzi’s tax declarations show that in 2013 he earned €40,442 as ministerial salary, and €16,025 in rental income, and benefited from a 20% tax reduction on rent of €3,205. In 2014, he earned a €51,672 salary and €21,543 in rental income, and benefited from a tax reduction of €4,309.

In his ministerial declarations, Mizzi has also declared some €310,000 in bank deposits, apart from €329,000 in loans for the Sliema property where he resides.

The tax declarations raise questions as to Mizzi’s alleged intentions to open an offshore company in Panama since the Australian Financial Review published emails from Nexia BT – who represent Panamaniam law firm Mossack Fonseca in Malta – showing the banks consulted for the opening of a bank account for Hearnville Inc. demanded at least $800,000 in initial annual deposits.

According to emails published in the AFR, Nexia BT and Mossack Fonseca enquired with seven different banks to open accounts for Hearnville, as well as for Tillgate, the offshore company opened for the Prime Minister’s chief of staff, Keith Schembri.

Schembri has confirmed on his part that his offshore structure was intended to transfer profits generated from his Kasco business group, and as a holding structure for waste recycling business interests in the Gulf and India, and to expand his business group in the remote gaming industry.

But Schembri denied that this was part of a joint business enterprise he was setting up with Mizzi, even though both Hearnville and Tillgate are mentioned in emails sent from Nexia partner Karl Cini to Mossack Fonseca, in which he specifies the use for the Panama companies.

While both Panama companies were acquired from Mossack Fonseca by Nexia in 2013, the auditors have denied having specifically acquired them for Schembri and Mizzi.

The latter say they formally acquired them on 2 June, 2015, which is when Mossack nominee company ATC Administrators transferred the ownership of the shelf companies to Orion Trust Ltd of New Zealand. For the past six months, Nexia and Mossack New Zealand had been setting up the two offshore trusts, Haast for Schembri and Rotorua for Mizzi.

Then on 16 June, Mizzi in a signed statement said that the transaction was being funded by “personal assets and proceeds from business” and that Hearnville was “Still not trading. Eventually management consulting and brokerage.”

Opposition leader Simon Busuttil has stated in parliament that brokerage fees could be a “form of bribery” and accused Mizzi of setting up a business venture using offshore secrecy while occupying a ministerial role and signing privatisation contracts that have not yet been tabled in the House.

PN deputy leader’s earnings

In the ensuing political melee provoked by Panamagate, Labour sought to hit out at PN deputy leader for party affairs Beppe Fenech Adami and the dubious permitting history surrounding his Gharghur villa.

The original house was acquired by Fenech Adami before several extensions over the 1990s on land that is outside development zones necessitated regularisation. The property was finally sanctioned by its inclusion in the redrawn development zones of 2006, but only after then prime minister Lawrence Gonzi instructed the planning authority to allow three exceptions to the Gharghur boundaries.

The Labour Party has also accused Fenech Adami of having built a swimming pool and deck that breache planning limits, apart from the fact that the deputy leader has not yet presented the original planning permit for the house he acquired.

In 2014 and 2013, Fenech Adami was the recipient of €21,000 and €16,000 in parliamentary honoraria, while also declaring professional earnings as a lawyer of €22,000 and €25,600; his wife is a notary public. Fenech Adami also earned €8,000 in rental income in 2014.