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Malta To Keep Controversial Vehicle Registration Tax

by Jason Gorringe, Lowtax.net, London
05 February, 2014

A spokesman from Malta's Finance Ministry has said that the country's vehicle registration tax will remain in force, despite long-standing opposition to the tax and a recent call for its removal by Labor MEP Joseph Cuschieri.

Mr Cuschieri raised the issue of the vehicle registration tax via a parliamentary question put to the European Commission (EC). He argued that the tax is unfair and should be eradicated at a pan-European level.

The Maltese government recently announced details of a scheme to refund between EUR25m and EUR30m (USD33.8m-40.6m) in value-added tax (VAT) which had been paid on top of the vehicle registration tax between May 01, 2004 and December 31, 2008. The scheme will see roughly 40,000 people refunded between EUR500 and EUR1,000 over a seven-year period.

Mr Cuschieri suggested that the revocation of the registration tax should follow on from the removal of VAT on registration.

The EC has previously stated that it is committed to simplifying procedures and conditions for vehicle registration, noting that the tax is an obstacle to European Union citizens. However, so far no visible progress has been made. Mr Cuschieri asked the EC to explain what steps it has taken and what it is now doing to remove the obstacles presented by the registration tax.

He said that Malta should set an example for the rest of the EU by being the first country to eliminate the tax.

It is estimated that removing the tax would cost the government about EUR40m in lost revenue.

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