Bill aims at plugging loopholes

A Bill aimed at plugging loopholes in the Motor Vehicles Registration Act was moved in Parliament yesterday by Transport Minister Jesmond Mugliett.

He said that, among other things, the Bill sought to stop abuses by people who made use of K-registered vehicles for long leases or even private use, and others who imported disguised commercial vehicles, with their glasswork replaced by panels, only for the panels to be later changed back to glass. In both cases the people involved avoided paying duties applicable for ordinary passenger vehicles.

The minister explained that K-plates were only supposed to be used on vehicles for short term leases - not more than 90 days. It had resulted, however, that some 200 K-plate vehicles of over 1800cc were being used for long-term lease. Such abuses were normally discovered three years after the importation of such vehicles, when they could be converted to normal plates without paying extra registration costs.

In terms of this bill, the owners of such vehicles were being given the opportunity to regularise their position by paying an additional registration tax of 17.5 per cent. This measure applied only for vehicles exceeding 1800cc and registered prior to December 31, last year. Mr Mugliett said the additional tax had been calculated at 17.5 per cent to bring the charge to equivalence with the duty payable in 1981. Vehicle owners who come clean would therefore be paying more but still saving from what they would have had to pay for an ordinary vehicle registration. The bill also extends to six months the exemption from the payment of excise duty allowed for vehicles registered and licensed in another country and brought to Malta temporarily.

This exemption applies for persons resident abroad who temporarily bring their vehicle for private or business use, foreign students studying in Malta, demonstration (sample) vehicles, goods vehicles used by EU-registered hauliers and vehicles operated by EU-registered carriers to carry out international carriage of passengers by road. Such measures also apply for Maltese in EU countries abroad.

Mr Mugliett pointed out that although the payment of registration tax for foreign-owned vehicles was being put off for six months, such vehicles needed to be registered immediately upon importation. This would remove problems which used to be encountered when traffic regulations were violated.

Earlier in his speech, Mr Mugliett said the purpose of the registration tax was not simply to raise revenue, but also to attempt to limit the number of vehicles on Malta's roads, more so as there was currently a vehicle for every two residents. Taxation was also meant to control the road-worthiness of vehicles.

He said that while certain countries are trying to harmonise taxes in the EU, Malta was continuing to insist that taxation should remain a national prerogative, not least because of the particular circumstances he had described.