A tax on our children

The shape of things to come: the administration of Dr Eddie Fenech Adami has already subordinated us to the European Union. Membership would lock us into the EU decision-making structures. All our institutions would become subordinate to EU institutions. The say Malta has been given in the EU main decision-making structures is minimal. As the smallest country in the EU Malta would have the smallest say in the Commission, the Council of Ministers, the European Central Bank and the European Parliament.

We are not members but the obligations of eventual membership have already imposed upon us the introduction of new taxes that even the Fenech Adami administration considered them harmful for our families. Yet the administration had to bow to the dictates of Brussels and introduce these new taxes. If Malta were to join the EU local taxpayers would have to pay over Lm73 million in direct taxes to the EU from 2004 to 2006.

But the direct costs in the first three years of membership would amount to more than Lm73 million. Add to these the millions of liri paid out by local taxpayers to meet the costs of complying with EU regulations. Then there are other millions of liri, financed also by local taxpayers, to subsidise farmers hurt by applying EU regulations to local agriculture. Local taxpayers would also have to fork out the difference in the prices for essential food imports like meat, sugar and grains set at EU prices.

The pain of paying more taxes is hard to bear. What makes it more unbearable is that local taxpayers' say is going to decrease in proportion to the rise in taxes. Local taxpayers will have to face more taxation but their representation in the structures running their affairs will be less.

Even by Government's own very generous estimates, the transfer of EU funds to Malta between 2004 and 2006 would amount to the grand sum of 18c a day per person living on these islands. The net benefits for Malta from EU funds are going to be far less than the 18c a day per person if you consider the extra money we all would have to fork out to pay for the costs of EU membership.

Colonialism wrapped in glitter

But the biggest cost of membership is not purely financial: while having to pay more taxes as a member state, we will have less say in the running of our affairs. EU membership would wipe out the political and economic gains we have made as a country since independence in 1964. Malta would go back to being a colony, although our new colonialism would come wrapped in the glitter of EU membership.

In The Observer (April 7, 2002) Robert Cooper, a senior British diplomat and Tony Blair's foreign policy guru, writes: "The EU has become a highly developed system for mutual interference in each other's domestic affairs, right down to beer and sausages.... European enlargement shows another kind of voluntary imperialism.... while you are a candidate for EU membership you have to accept what is given - a whole mass of laws and regulations - as subject countries once did."

The Fenech Adami administration has had to agree to introduce VAT on books and printed matter to comply with EU membership obligations. This will hurt the thousands of children and young people in education referred to in the answer to PQ 37,904 last week.

In a document prepared by the Finance Ministry, dated September 28, 2001, the Fenech Adami administration tried to persuade the EU not to enforce the membership obligation of introducing VAT on books and printed matter. The ministry made the valid point that while exempting tiny Malta from VAT on books and printed matter would not hurt the EU, the introduction of VAT would have "a negative impact on consumers, while also compromising the government's objective to encourage a wider readership among the population in general."

The ministry argued validly that the introduction of VAT on books and printed matter will be a setback in the campaigns against illiteracy and would burden families with higher costs for local and imported books, newspapers and periodicals. It makes the point that education costs have already increased because of the obligations of membership: "the government decision to re-categorise education services as exempt without credit, which was implemented within the context of the ongoing process related to the approximation of the Maltese VAT to the Sixth Directive. This measure has produced a negative impact on prices for the same category of consumers (mainly students) that would be hit by the introduction of tax on printed matter."

Blind fanatical support for membership

For the same reason, student and teacher organisations in Britain have resisted the introduction of VAT on books and printed matter. They have argued that "it is vital for the UK government to maintain the principle of a zero rate for books and newspapers as the wide availability of books and other publications is essential to education, to understanding and to the growth of our society." These organisations believe that "levying VAT on books would have a detrimental effect on the purchasing power of schools, libraries, students and individuals".

Needless to say we have heard no such words from the Malta Union of Teachers and the University Students' Council as their leaders support EU membership with blind fanaticism.

The European Booksellers Federation based in Brussels recently stated: "DON'T TAX READING! The VAT rate applied to printed books by member states throughout the EU currently varies from 0% to 25%. The Customs and Taxation Directorate within the European Commission is currently developing plans to harmonise VAT rates throughout the EU. Indications suggest that in the future member states may be instructed to allocate a VAT rate of not less than 15% on almost all products and services. However, EU countries may well be able to impose a reduced rate of not less than 5% on a small number of items, including printed books."

The European Booksellers Federation urged the Commission "that any member state of the EU that wishes to allocate a 0% VAT rate for books should be allowed to do so. This position is supported by the Council of Europe and UNESCO."

The European Commission shows no signs of heeding this call. Member states have been given till July 1 to comply with EU directive 2002/38/EC introducing VAT on cultural activities, education, information services, sports, science and leisure. If Malta were to become a member it would have to abide by this directive and the recent decision to make ballet and music lessons VAT-exempt would have to be reversed.

The Labour Party's EU partnership policy is beneficial for local families because it allows taxation to remain the prerogative of the Maltese government. A Labour government would design VAT in the interests of families. There will be no VAT on books, printed matter, education, culture and sports.

evaristbartolo@hotmail.com