Brussels mulls taking departure tax issue to court

European Commission officials are studying a second dossier just sent by the Maltese government on the departure tax and are expected to decide shortly whether to recommend that Malta is taken to the European Court of Justice over the issue.

Commission sources told The Times that its services are analysing the Maltese response to a reasoned opinion, the second stage of its legal proceedings, issued against Malta last December.

"We can confirm that Malta has replied to our second warning with a letter received recently," the sources said. "Although we are still studying the arguments brought forward by Malta, it is already clear that the issue will almost certainly be taken to the European Court if Malta does not end the discriminatory aspects of the legislation."

The Commission had initiated infringement procedures against Malta over the matter in July and followed it up in December by a reasoned opinion after rejecting the arguments brought forward by Malta.

In its reasoned opinion, the Commission is maintaining that the airport tax in Malta, which from the beginning of next month will go down to Lm10 from Lm20 per passenger, is discriminatory as it is only levied on an air passenger beginning an international journey from Malta airport and excludes those who had started the journey outside Malta.

The Commission argues that the tax puts an unfair burden on residents in Malta and makes it more difficult for them to receive and provide services in other member states.

Following the budget decision taken by the government last year to slash the tax by half, Commission sources had told The Times the cut would not make any difference to the Commission's arguments because "the fact that the tax has been reduced is not relevant to the discriminatory aspect of the passenger service charge".

The sources had said that the decision of a reasoned opinion meant that the tax must be removed completely.

The departure tax was introduced in two stages over a period of eight years. It was first introduced in 1997 and then doubled in 2005.