MEPs call for end to double taxation on car registration

The European Parliament's Economic and Monetary Affairs Committee has approved an amendment tabled by Joseph Muscat calling on member states to refrain from imposing double taxation in the case of vehicle registration taxes, especially in the case of EU citizens returning to their country of origin after spending more than two years in another member state.

Mr Muscat said the government should take the cue from this call.

"The Maltese government is not only imposing a high level of what is essentially double taxation on Maltese returned migrants, but is also preventing Maltese citizens and foreign residents in our country from benefiting from the internal market in this sector," Mr Muscat maintained.

The committee approved the report that supports the European Commission's proposal to phase out vehicle registration taxes in favour of an annual emissions tax. This change would be budgetary-neutral for governments in the medium-term.

It would, however, benefit consumers since not only would it make double taxation a thing of the past but it would also lead to a reduction in car prices, enhance transparency and comparability of prices, and would make it viable to buy a car from another country, the report states.

Furthermore, it would decrease the amount that would need to be sourced from credit facilities and would encourage the purchase of smaller and more environment-friendly cars which would be subject to a lower tax rate.

The report also suggests the incorporation of a refund system to compensate those who have already paid a registration tax. The committee approved further amendments by Mr Muscat calling for this refund system to be fair and transparent.

This report will now go to the Parliament's plenary session. If approved, it will be a strong signal to member states to reach agreement to change the present system.