Nationalist MEP's fresh campaign on departure tax

The leader of the Nationalist group in the European Parliament, Dr Simon Busuttil, is not yet convinced that the new departure tax imposed by the government last August is compatible with EU law and is launching a new campaign in the European Parliament aiming at getting the government review its decision.

Dr Busuttil told The Sunday Times that he had long been arguing against this tax and this week will put a series of question to the European Commission to have this issue fully investigated.

"I have already declared publicly and repeatedly where I stand on this issue. I think that, in its current form, the departure tax infringes EU law on more than one count so I think that it should be revised or repealed altogether.

"My assessment is that this tax poses difficulties when tested against the EU principles of free movement of services, free movement of capital and most importantly, on free movement of persons.

"But of course, this is just my interpretation and the final decision is not mine."

In the 2004 Budget, the government had announced an increase in departure tax from Lm10 to Lm20 per ticket effective on August 1. This substantial rise was greeted with resentment from many quarters, especially the travel industry. However the government insisted that the tax was part of a package designed to rein in the structural deficit.

Dr Busuttil said that over the past year, he made various approaches to the government to raise the issue.

"I sensed that there is an understanding, albeit not an acceptance, that the tax in its current form may go against the spirit, if not against the letter, of EU law. However, I was hoping that this appreciation would lead to some form of concession in the last Budget, but this didn't happen."

Dr Busuttil said that this means that the quest to address the ambiguity of this tax, if not the outright incompatibility with EU law, must continue.

"This week I shall submit five parliamentary questions calling upon the European Commission to take a clear and definitive stand on the matter. I will also be urging the Commission to complete its work on pending complaints on this matter at the earliest."

Asked whether he really thinks that this will get the government to change its mind, Dr Busuttil said that since there is no precedent to follow, he does not expect this case to be easy.

"However, I hope that the Commission will seriously analyse the arguments rather than take a short cut. But I remain cautiously optimistic that the outcome will be positive."