The government should draw up schemes to cushion the impact on Maltese consumers if the EU continued to resist Malta's request to keep VAT off food and medicinals, European Greens' general secretary Arnold Cassola said.
Dr Cassola, who is also Alternattiva Demokratika's spokesman on EU affairs, said he had been informed that Malta's request to retain a zero-VAT rating on foods and medicinals would not be accepted.
Sources close to the negotiating team said yesterday that Malta was still insisting on retaining the zero VAT rate, and would maintain its stand as long as other EU member states had similar arrangements.
"It's true that the commission has said 'no' to our requests on VAT and the situation appears negative, but at this point we have taken the issue to a political level with member states," the government sources said.
The sources also pointed out, however, that since the levies on products imported from the EU would have to be removed, certain foodstuffs would actually be cheaper even if five per cent VAT was imposed. On the other hand, products imported from outside the EU would be subject to tariffs, making them more expensive than at present.
Dr Cassola said that in all probability, Malta would have to introduce the lowest VAT rate at five per cent.
The government was also likely to obtain a transition period and within that timeframe it should implement schemes to absorb the costs for consumers.
Cyprus, which has not been granted a zero-VAT rate for the same sector, has given its citizens tax rebates to make up for the increases in VAT.
Likewise, in Belgium all citizens are entitled to a 10 per cent refund in return for their pharmacy receipts at the end of the year, Dr Cassola said.
Dr Cassola said the zero-VAT request was not expected to be granted mainly because it went against basic EU regulations.
Although Ireland and the UK were exempt from such a rate, one had to bear in mind that the two countries have been members for several years, he said.
Likewise, the UK and Denmark were exempt from the Social Charter, while three countries have been given an opt-out from the euro.
New members would, however, have no choice but to implement the acquis communautaire.
Dr Cassola was critical of the Maltese negotiating team and said that the main problem with the Maltese government was that it was trying to accommodate everybody. Yet, at the same time, "it has the wrong priorities".
He criticised Malta's EU preparations and said that in Brussels, Malta was considered by top EU bureaucrats to be among the worst-prepared countries in the drawing up of certain project proposals which would entitle the island to structural funds.
"We are renowned for asking for something without proper planning," he said.
Speaking about the environment chapter, Dr Cassola said this particular chapter had been hijacked for too long by the hunting issue.
"The EU will never allow hunting in spring and this is a positive factor. This will encourage biodiversity and will give respite to migratory birds," Dr Cassola said.
"We are the third most densely populated country in the world following Macau and Singapore. In this already limited space, a lot of land is taken up, some of it illegally, by hunters. We are approaching a state where soon there will be no countryside left."
"If the government wants to interpret the acquis according to its liking, it can go ahead. But it is preposterous for the government to go to Brussels and defend illegality."
However, sources close to the EU negotiations said that the Maltese team was still optimistic about obtaining a concession for hunting in spring.
The biggest stumbling block appeared to be trapping, which has been given the thumbs down by the commission, the sources said.
Dr Cassola said the EU could provide the biggest stimulus for modernisation of Malta's structures and that the environment would stand to benefit most from membership.
Land management, sewage plants, air quality and pollution were among the issues which would be tackled by the EU, Dr Cassola said.
"We know about our sewage problems, the chimneys, the high incidence of asthma and breast cancer, and yet for years we have shelved these problems. At least the negotiations have forced the government to commission reports and face the music," he said.